The International Financial Services Centres Authority (IFSCA) has taken a significant step toward transforming the Indian financial ecosystem by releasing a revised consultation paper on the Draft Revamped Regulatory Framework for Global Access in the IFSC, dated May 8, 2025. This paper is not only a response to evolving global market dynamics but also a crucial initiative to bring regulatory clarity and structure to a rapidly growing segment — cross-border investments by Indian investors and intermediaries.
Why the Revamp?
The central objective of the revised consultation paper is to solicit comments from stakeholders and the public on a framework that will enable regulated access to global markets via the GIFT City International Financial Services Centre (IFSC). At present, many entities offer access to foreign securities from within India under ambiguous or unregulated setups. This has raised concerns around transparency, investor protection, and regulatory oversight.
By moving these activities into the IFSC — a jurisdiction designed to function as a gateway for international financial services — the IFSCA aims to ensure such operations occur within a transparent, efficient, and well-supervised environment. This shift is particularly important for safeguarding Indian retail investors participating under the Liberalised Remittance Scheme (LRS), which allows them to invest abroad up to a specified limit.
Key Features of the Revised Framework
The revised framework introduces several critical changes based on comprehensive stakeholder feedback, including inputs from broker-dealers, stock exchanges, and international market participants.
One of the most notable updates is the redefinition and classification of market participants involved in global access:
Global Access Providers (GAPs): Broker-dealers registered with IFSCA who have formal arrangements with foreign brokers to provide global market access.
Introducing Brokers: IFSC-based brokers that do not directly facilitate trading but refer clients to GAPs.
Introducers: Non-broker entities that refer clients to GAPs in exchange for fees or commissions.This tiered classification creates operational clarity and sets the foundation for a structured ecosystem, making it easier for investors to understand whom they are dealing with and under what regulatory umbrella.
Net Worth Requirements: Lowering Entry Barriers
To encourage broader participation without compromising financial integrity, the IFSCA has introduced a differentiated net worth regime. For example:
GAPs that are subsidiaries of recognised stock exchanges or cater to client trading must maintain a net worth of USD 500,000.
GAPs involved solely in proprietary trading need just USD 200,000.
Introducing Brokers and proprietary traders using GAPs must hold USD 100,000.This flexible structure supports inclusivity by allowing a wider range of players — from large institutions to smaller brokerages — to participate, provided they meet the risk and capital adequacy standards.
A Forward-Looking Approach
IFSCA’s revised framework is more than just a compliance exercise — it is a strategic policy shift designed to bolster India’s position as a global financial hub. By creating a robust, transparent, and flexible regulatory regime, it lays the groundwork for seamless cross-border trading for both institutional and retail investors.
As the consultation phase continues, the onus is now on market participants to engage, respond, and help shape a framework that aligns with both global best practices and the unique needs of Indian investors.
