Understanding Key Amendments - September 2025

SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI Issues Draft Circular Proposing Revisions to Block Deal Framework

Circular: SEBI Draft Circular dated August 22, 2025

Overview

SEBI has issued a draft circular proposing an amendment to the Block Deal Framework to enhance transparency, operational efficiency, and market integrity in large trades. The proposals are based on recommendations of various stakeholders, a Working Group comprising representatives from Stock Exchanges (BSE, NSE), Clearing Corporations (NCL, ICCL), AMFI, ANMI, and BBF which was constituted to review the existing Block Deal Framework, as well as inputs from the Secondary Market Advisory Committee (SMAC). Public comments have been invited before finalisation of the framework.

Key Provisions / Proposed Amendments

1. Definition of Block Deal

   • Large trades executed via a single transaction through a dedicated window, without disadvantaging either party.

     
     

2. Block Deal Windows

   • For this purpose, stock exchanges are permitted to provide a separate trading window.

   • Morning Window: 08:45 AM – 09:00 AM; reference price or execution of block deals in this window shall be the previous day’s closing price of the Stock.

   • Afternoon Window: 02:05 PM – 02:20 PM; reference price for block  deals  in  this  window  shall  be  the volume weighted average market price  (VWAP) of trades executed in the stock  in  the  cash  segment  between 01:30 PM – 02:00 PM; VWAP calculation period shall be 02:00 PM – 02:05 PM where necessary  information  regarding  the  VWAP  applicable  for  the execution of block deals in the Afternoon block deal window shall be disseminated.

     
     

3. Price Range for Orders

   • F&O stocks: ±1% of reference price.

   • Non-F&O stocks: ±3% of reference price (with surveillance safeguards).

4. Order Size & Settlement

   • Minimum order size = INR 25 crore.

   • Mandatory delivery-based settlement (no squaring off or reversal) for every  trade  executed  in the block  deal windows.

5. Disclosures

   • Stock exchanges to publish block deal data after-market hours, including:

     • Name of the scrip

     • Client name

     • Quantity traded

     • Price

6. Risk & Surveillance Measures

   • All risk containment, trading, settlement, and surveillance mechanisms applicable to normal trades will also apply to block deals.

7. Public Comments

   • SEBI has invited feedback from stakeholders (market participants, legal advisors, institutional investors).

   • Deadline: September 15, 2025.

   • Mode: Online submission via SEBI’s public comments portal.

SEBI Permits Use of Liquid and Overnight Mutual Funds for Deposit Compliance by Investment Advisers and Research Analysts

Notification No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/116, dated August 12, 2025

Overview

SEBI has amended the deposit compliance framework for Investment Advisers (IAs) and Research Analysts (RAs) under Regulation 8 of the SEBI (Investment Advisers) Regulations, 2013 and Regulation 8 of the SEBI (Research Analysts) Regulations, 2014 where the SEBI from time to time specified the requirement to maintain a deposit of certain sum. Such deposit was required to be maintained with a scheduled bank marked as lien in favour of Investment Adviser Administration and Supervisory body (IAASB) or Research Analyst Administration and Supervisory body (RAASB), as the case may be. The amendment, based  on  the representations  from  industry  participants  and  inputs  received through  public  consultation,  SEBI  Board  in  its  meeting  held  in  June  2025, provides flexibility by allowing the use of liquid mutual funds and overnight mutual funds in addition to scheduled bank deposits for meeting regulatory deposit requirements. The change is effective immediately, with implementation deadlines set for September 30, 2025.

Key Provisions

1. New Options for Regulatory Deposit

   IAs and RAs may now maintain deposits in any of the following forms:

   • Units of liquid mutual funds

   • Units of overnight mutual funds

   • Scheduled bank deposits (as permitted earlier)

2. Lien Requirement

   • Deposits must be marked as lien in favour of:

     • IAASB (Investment Adviser Administration and Supervisory Body) – for IAs

     • RAASB (Research Analyst Administration and Supervisory Body) – for RAs

3. Administrative Implementation

   • IAs and RAs must ensure compliance with the revised norms on or before September 30, 2025.

   • BSE Limited, acting as IAASB/RAASB, has been instructed to implement necessary systems and communicate these changes to all registered entities.

SEBI Amends FPI Regulations to Ease Norms for Government Securities Investors

Circular No. SEBI/LAD-NRO/GN/2025/254, dated August 11, 2025

Overview

SEBI has notified the Foreign Portfolio Investors (Amendment) Regulations, 2025, introducing targeted relaxations for FPIs that invest exclusively in Government Securities. These amendments provide exemptions from certain eligibility, ownership, and disclosure requirements that apply to other FPIs, to ease participation while safeguarding regulatory oversight. The Amended Regulations will come into force 180 days from publication in the Official Gazette.

Key Provisions

1. Eligibility Criteria for FPIs

   • Sub-clauses (i), (ii), and (iv) of Regulation 4(c) of the amended regulations relating to broad-based criteria and ownership thresholds shall not apply to FPIs investing only in Government Securities.

   • Exemption is conditional upon compliance with requirements specified by SEBI.

2. Obligations and Responsibilities of FPIs

   • Regulation 22(1)(l): FPIs investing exclusively in Government Securities are exempt from this clause, subject to SEBI conditions.

   • Regulation 22(3): Such FPIs are exempt from requirements relating to control and beneficial ownership disclosures, again subject to SEBI-prescribed safeguards.

   • Regulation 22(5): Exemption from obligations under this sub-regulation has also been granted for FPIs investing solely in Government Securities.

Relaxation in Timeline for Submission of Net Worth Certificate by Stock Brokers Offering Margin Trading Facility

SEBI Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2025/120, dated August 26, 2025

Overview

SEBI in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 51 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 has revised the submission timeline for net worth certificates applicable to stock brokers offering Margin Trading Facility (MTF). The change aligns the certification deadlines with the financial reporting timelines under Regulation 33 of the SEBI (LODR) Regulations, 2015, giving brokers additional time to meet compliance requirements.

Previous Requirement (per Master Circular, Dec 30, 2024)

• As on March 31 : Certificate due by April 30

• As on September 30 : Certificate due by October 31

Revised Timelines

Stock brokers must now submit an auditor-certified net worth certificate:

• By May 31 : for half-year ending March 31

• By November 15 : for half-year ending September 30

Implications

• Provides brokers extended timelines for submission.

• Brings consistency with broader financial reporting obligations.

• Reduces compliance pressure by synchronizing certification with reporting cycles.

SEBI Notifies Third Amendment to InvIT Regulations, 2025

SEBI Notification No. SEBI/LAD-NRO/GN/2025/259, dated September 01, 2025

Overview

SEBI in exercise of powers conferred under Section 30 read with Section 11 and Section 12 of the Securities and Exchange Board of India Act, 1992 has notified the Third Amendment to the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”). The amendments focus on enhancing regulatory clarity, improving disclosure norms, streamlining compliance timelines, and widening investor participation by lowering investment thresholds.

Key Amendments

1. Definition of Public (Regulation 2(1)(zq))

   • Excludes related parties of InvIT, sponsor/sponsor group, and manager.

   • SEBI may specify additional exclusions.

   • Qualified Institutional Buyers (QIBs) will be considered ‘public’ even if otherwise excluded.

2. Reporting of Under-Construction Projects (Regulation 10(18))

   • Development status disclosures to follow quarterly financial results timeline.

   • Valuation reports under Regulations 21(4), (5), and (5A) to be submitted to the trustee and stock exchanges simultaneously.

3. Quarterly Disclosures (Regulation 10(24))

   • Investment manager disclosures to align with quarterly financial result submissions.

4. Minimum Investment Threshold (Regulation 14)

   • Reduced from INR 1 crore : INR 25 lakhs.

   • Omission of earlier INR 25 crore minimum for InvITs investing 80% in completed, revenue-generating assets.

5. Distribution of Cash Flows (Regulation 18(6)(ba))

   • HoldCos may adjust negative net distributable cash flow against SPV cash flows.

   • Must be disclosed to unitholders as per SEBI’s prescribed manner.

6. Valuation Reports & Timelines (Regulation 21)

   • Annual valuation (Regulation 21(4) of the InvIT Regulations) (March 31) with annual results.

   • Half-yearly valuation (Regulation 21(5) of the InvIT Regulations) (September 30) with September quarterly results.

   • Quarterly valuation trigger (Regulation 21(5A) of InvIT Regulations) if borrowings > 49% (June, September, December).

   • No separate September report if half-yearly valuation already submitted.

   • All reports to follow prescribed timelines (Regulation 21(6) of the InvIT Regulations).

7. Reporting Obligations (Regulation 23)

   • Half-yearly report (Regulation 23(4)) to be submitted with September quarter results.

   • Quarterly reporting for high-leverage InvITs (Regulation 23(4A)): If borrowings > 49%, reports must be submitted with June, September, and December quarter results.

SEBI Notifies Second Amendment to REIT Regulations, 2025

SEBI Circular No. SEBI/LAD-NRO/GN/2025/258, dated September 01, 2025

Overview

SEBI has notified the Second Amendment to the SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”). These amendments are designed to enhance disclosure standards, streamline compliance timelines, and provide clarity on definitions and reporting obligations.

Key Amendments

1. Definition of Public (Regulation 2(1)(ze))

   • Excludes:

     • Related parties of the REIT

     • Sponsor, sponsor group, or manager

     • Any other person as may be specified by SEBI

   • Qualified Institutional Buyers (QIBs) will continue to be treated as ‘public’ even if falling under exclusions.

2. Reporting of Under-Construction Properties (Regulation 10(18))

   • Development status disclosures now aligned with quarterly financial result timelines.

   • Valuation reports under Regulations 21(4) and 21(5) to be submitted to trustees and stock exchanges simultaneously.

3. Distribution of Cash Flows by HoldCo (Regulation 18(16)(aa))

   • HoldCos may offset negative net distributable cash flows against SPV cash inflows.

   • Must be disclosed to unitholders in the manner prescribed by SEBI.

4. Valuation Reports & Timelines (Regulation 21)

   • Annual Valuation (Reg. 21(4) of the REIT Regulations): As on March 31, submitted with annual financial results.

   • Half-Yearly Valuation (Reg. 21(5) of the REIT Regulations): As on September 30, submitted with September quarter financial results.

   • Submission Requirements (Reg. 21(6) of the REIT Regulations):

     • Timelines clarified for trustee and exchange submissions.

     • Removal of obligation for mandatory unitholder communication unless specifically required.

FOREIGN EXCHANGE MANAGEMENT ACT

Foreign Exchange Management (Guarantees) Regulations, 2025

Overview

On 14 August 2025, the Reserve Bank of India (RBI) released the draft Foreign Exchange Management (Guarantees) Regulations, 2025 for public comments. These will replace the 2000 framework. The draft shifts from a transaction-specific, approval-driven regime to a principle-based system. The focus is on ensuring FEMA compliance, mandatory reporting, and extending responsibility to all person’s resident in India (PRII) involved in cross-border guarantees. The aim is to simplify processes while maintaining regulatory oversight, aligning the guarantee regime with existing FEMA frameworks like ECB, ODI, and borrowing and lending rules.

Key Provisions

• Broader compliance responsibility: PRIIs acting not just as sureties, but also as creditors and principal debtors, must ensure FEMA compliance.

• Validity of guarantees: Guarantees are permitted only if both the underlying and any resultant transactions (including invocation) comply with FEMA.

• Ban codification: AD Banks remain barred from issuing Letters of Undertaking (LoUs) and Letters of Comfort (LoCs), in line with the 2018 discontinuation.

• Link to borrowing rules: PRIIs issuing guarantees for PROIs must comply with the FEMA Borrowing and Lending Regulations, 2018.

• Exemptions:

  • AD Bank branches abroad, when acting in the ordinary course of business where no Indian resident is involved.

  • Custodian banks issuing irrevocable payment commitments for FPIs, consistent with Non-Debt Instruments Rules, 2019.

• Mandatory reporting: PRIIs must report issuance, modification, and invocation of guarantees within seven days through AD Banks, in prescribed formats.

• Delayed reporting: Can be regularised with a Late Submission Fee for up to three years.

• Documentation: All guarantees must be supported by an agreement.

• Transparency: RBI may make reported information publicly available.

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA

Amendments to the Insolvency and Bankruptcy Board of India (Continuing Professional Education for Insolvency Professionals) Guidelines, 2019

Overview

Based on its powers under section 196 of the Insolvency and Bankruptcy Code, 2016, the Insolvency and Bankruptcy Board of India (IBBI), through a notification dated 13^th August 2025, has amended the 2019 Continuing Professional Education (CPE) Guidelines for Insolvency Professionals (IPs). The 2025 amendments tighten the professional development framework by increasing annual learning requirements, introducing mandatory in-person participation, and expanding recognised learning activities. The changes are aimed at strengthening IP competence, ensuring hands-on exposure, and broadening subject coverage to include emerging risk areas like money laundering and fraud detection.

Key Provisions

1. Minimum Credit Hours

   • Every IP must complete 30 credit hours of CPE per calendar year.

   • No CPE requirement in the year of initial registration.

   • Obligation continues even if the IP’s registration is suspended or assignment authorisation is not held.

2. Mandatory Minimum In-Person Learning

   • The minimum percentage of total CPE credits to be undertaken through  in-person learning programs:

     • 2026: 40%

     • 2027: 50%

     • 2028 onwards: 60%

3. Recognised Learning Activities

   • Participation in programs conducted by IBBI, IPAs, Registered Valuer Organisation (RVOs), statutory professional institutes, universities, or other approved entities.

   • Contribution through lectures, faculty roles, and publications also count.

   • Credit allocation examples:

     • Workshop Conferences, Seminars, Training Programmes, Refresher Programmes, Certificate Courses, Conventions and Symposia and the like (full day, in-person by IBBI/IPA): If organised by IBBI/IPAs, credit hours are 2 (half-day) and 4 (full-day) for virtual, and 3 (half-day) and 6 (full-day) for in-person. For other entities, they are 1 and 2 (virtual) and 2 and 4 (in-person).

     • Faculty role: duration of the activity

     • Article in national newspaper: 4 hours

     • Article in referred/national/international journal: 8 hours

     • Book publication: 30 hours (in year of publication)

     • Completing a two-year Post-Graduation Course: 20 hours in the year of completion

     • Ph.D.: 40 hours (in year of conferment)

     • Limited Insolvency Exam: 40 hours (in year of passing)

     • Pass in Valuation Examination of an asset Class: 20 hours in the year of passing

     • IPs acting as NCLT / NCLAT members: CPE requirement deemed fulfilled during the period of service as a Member.

4. Prior Approval Requirement

   • IPs must seek prior approval from their IPA before joining CPE programs organised by entities other than IBBI/IPAs.

   • IPAs are tasked with processing these approvals diligently and within reasonable timelines.

5. Expanded Subject Areas

   • The schedule of relevant topics now includes Prevention of Money Laundering Act and fraud detection, in addition to existing insolvency-related themes.

RESERVE BANK OF INDIA

RBI Opens Vostro Route for Foreign Investment in Government Securities.

Overview

On 12 August 2025, the Reserve Bank of India (RBI) allowed persons resident outside India, maintaining Special Rupee Vostro Accounts (SRVAs) for international trade settlement, to invest their surplus rupee balances in Central Government securities, including Treasury Bills. This step, issued under Sections 10(4) and 11(1) of Foreign Exchange Management Act (FEMA), 1999, broadens the use of rupee-denominated accounts in cross-border finance. It builds on the SRVA framework introduced in July 2022 and strengthens the role of the rupee in global trade settlements. The change has been incorporated into the RBI (Non-resident Investment in Debt Instruments) Directions, 2025, making such investments operational from 12 August 2025.

Key Provisions

• Eligible investors: Persons resident outside India holding SRVAs.

• Permitted instruments: Central Government securities, including Treasury Bills.

• Legal basis: Issued under FEMA, with reference to:

  • Foreign Exchange Management (Debt Instruments) Regulations, 2019 (Schedule 1)

  • Foreign Exchange Management (Deposit) Regulations, 2016

  • RBI (Non-resident Investment in Debt Instruments) Directions, 2025

• Framework linkage: Builds on the July 11, 2022 SRVA framework (introduced through A.P. (DIR Series) Circular No. 10) that enabled INR-based trade settlements.

• Operational mechanism: Updated provisions integrated into the Directions dated 7 January 2025.

• Compliance: Authorised Dealer Category-I banks must inform and guide their customers, ensuring adherence to operational and reporting requirements.

• Impact:

  • Provides a secure, sovereign-backed investment avenue for surplus rupee balances of non-residents.

  • Deepens INR’s role in international transactions and trade finance.

  • Enhances RBI’s oversight under FEMA while supporting cross-border financial integration.

INTELLECTUAL PROPERTY RIGHTS

Draft Geographical Indications (Registration and Protection) (Amendment) Rules, 2025 – Fee Revisions and Key Updates

Overview

On 11 August 2025, the Department for Promotion of Industry and Internal Trade (DPIIT) issued draft rules proposing amendments to the Geographical Indications of Goods (Registration and Protection) Rules, 2002. The draft rules are issued under section 87 of the Geographical Indications (GI) Act, 1999, and are open for public comments for 30 days. The primary focus of the amendments is to revise the fee structure for various GI-related applications, renewals, oppositions, and other administrative processes, making the fees uniform and clearly linked to specific forms and actions.

Key Provisions

1. Fee Structure Updates

   • Applications for GI registration for goods: ₹1,000 per class (including for convention countries and multi-class applications).

   • Oppositions and counter-statements: ₹1,000 per class.

   • Extensions and rectifications: ₹300–1,000 depending on the request type.

   • Renewal of GI registration: ₹500 at expiration of last registration; additional fees for restoration.

   • Authorized users: ₹10 for registration or renewal; ₹30–₹100 for address/name corrections or certificates.

   • Geographical indications agents: ₹1,000 for registration, issuance of certificate, restoration, and annual continuance.

   • Special protections and alterations: ₹300–12,000 depending on nature of application.

   • Inspections and document copies: ₹100 per hour, 15 minutes for computer search, or per page beyond the first.

2. Coverage of Forms

   • Fees are explicitly linked to corresponding GI forms (GI-1 through GI-10) to streamline administrative compliance.

3. Administrative Clarifications

   • Fees apply to actions such as registration, renewal, rectification, restoration, oppositions, extensions, changes in proprietor or authorised user details, and requests for certificates.

   • Specific fees also cover additional protection for certain goods and applications to alter registered GIs.

4. Public Consultation

   • Comments and suggestions are invited by 30 days from publication, to be addressed to the Secretary, DPIIT, or via email.

This amendment primarily simplifies and standardises the fee schedule across GI applications, renewals, oppositions, and related administrative procedures, making compliance more transparent for stakeholders.

GIFT CITY

IFSCA Introduces Common Application Form under TechFin and Ancillary Services Regulations, 2025

Notification No. eF.No. IFSCA-GIC/1/2024-CM, dated July 31, 2025

Overview

The International Financial Services Centres Authority (IFSCA) has introduced a Common Application Form (CAF) under the IFSCA (TechFin and Ancillary Services) Regulations, 2025 (TAS Regulations). The CAF is designed to streamline registration for entities seeking to establish operations in GIFT City IFSC, by consolidating regulatory and SEZ compliance into a single application. This step aims to simplify entry, enhance regulatory clarity, and ensure robust governance for TechFin and Ancillary Service providers.

Key Provisions

1.CAF Introduced

• Standardised form for registration under TAS Regulations.

• Applicable to both (i) entities setting up a branch in GIFT City IFSC, and (ii) entities incorporating a new unit/entity in IFSC.

• The new fee structure for such applications is provided at Annexure–II of the circular. All other terms and conditions prescribed under the TAS Regulations shall apply.

2. Scope of Application

• Covers all applicants intending to provide TechFin or Ancillary Services within IFSC.

• Supplementary forms may be required for specific business activities.

3. Dual Compliance Requirement

• CAF integrates requirements of both IFSCA and SEZ frameworks.

• Requires details sought by the Development Commissioner, submission of SEZ fees, and investment projections.

4. Mandatory DocumentationApplicants must submit:

• Corporate documents (MoA, AoA, incorporation certificates)

• Business plan with five-year projections

• Shareholding and UBO disclosures

• Fit-and-proper declarations for promoters/directors

• Detailed AML/CFT, compliance, and governance frameworks

5. Permitted Services

• ·       Ancillary Services: Legal, audit, compliance support, HR, KPO, fund admin, valuation, trusteeship, secretarial, etc.

• ·       TechFin Services: AI/ML, Web 3.0, quantum tech, blockchain, cybersecurity, regtech, ERP, payment systems.

6. Prohibited ServicesEntities are barred from:

·       Core financial activities reserved for regulated entities

·       Facility management, logistics, or construction services

·       Any other activity restricted by IFSCA

7. Code of ConductApplicants must commit to:

·       FATF compliance and disclosures on high-risk jurisdictions

·       Maintaining infrastructure and personnel in IFSC

·       Full cooperation with regulators and proper registration for regulated activities

8. Pending Applications (Transition Provision)

• All pending applications under existing frameworks, as of the date of notification of TAS Regulations, 2025, shall be processed as per those existing frameworks.

• Where in-principle approval has already been granted under the existing framework, the entity shall continue operations under those frameworks and pay applicable fees until it is granted a Certificate of Registration (CoR) under TAS Regulations.

9. Transition for Existing Entites

• Entities authorised under existing frameworks may continue operations for 12 months from the date of notification of TAS Regulations (extendable by the Authority), or until grant of CoR under TAS Regulations, whichever is earlier.

• During this transition, such entities will remain subject to applicable fees and conditions of their current framework.

10. Undertaking and Affidavit

• Declaration confirming accuracy of submissions, compliance with TAS Regulations, and assurance against misuse of funds or involvement in prohibited activities.

  
  

IFSCA Notifies Regulatory Framework for Third-Party Fund Management Services

Notification No. IFSCA/GN/2025/007, dated July 24, 2025

Overview

The International Financial Services Centres Authority (IFSCA) In exercise of the powers conferred by sub-section (1) of Section 28 read with sub-section (1) of Section 12 and sub-section (1) of Section 13 of the International Financial Services Centres Authority Act, 2019, and Section 28C of the Securities and Exchange Board of India Act, 1992, has notified the Fund Management (Amendment) Regulations, 2025, which introduce a new Part D under Chapter VI of the principal Fund Management Regulations, 2025. This amendment establishes a dedicated regulatory framework for Third-Party Fund Management Services (TPFMS) within the IFSC. The framework permits registered Fund Management Entities (FMEs) to manage schemes on behalf of eligible third-party fund managers, while ensuring strong compliance, liability safeguards, and minimum capital requirements. These regulations come into force from the date of their publication in the Official Gazette on July 24, 2025.

Key Provisions

1. Introduction of TPFMS (Regulations 107A–107B)

• FMEs may launch and manage schemes for third-party fund managers, subject to IFSCA authorisation.

• Third-party fund managers must be regulated entities in their jurisdiction, authorised to conduct fund/portfolio management or advisory activities.

• “Third-party fund management services” are defined as the activity wherein a registered FME manages schemes on behalf of a third-party.

2. Authorisation & Compliance (Regulation 107C)

• FMEs must obtain specific authorisation from IFSCA before offering TPFMS.

• Authorised FMEs:

  • Remain fully liable for compliance, regardless of indemnities.

  • Must maintain adequate compliance infrastructure.

  • Must follow additional IFSCA conditions as prescribed.

• FMEs and fiduciaries are responsible for ensuring compliance.

3. Form of Incorporation (Regulation 107D)

• Eligible FMEs must be incorporated in IFSC as a company, LLP, or other permitted legal form.

• Foundational documents must expressly authorise TPFMS activities.

4. Appointment of Principal Officers & KMPs (Regulation 107E)

• Each TPFMS scheme must have a dedicated Principal Officer responsible for fund management, risk, and compliance.

• In FMEs (Non-Retail), the same compliance officer may oversee both self-managed schemes and TPFMS schemes.

• In FMEs (Retail), compliance officers must be separate for retail and non-retail/TPFMS schemes.

• For AUM calculations in appointing additional KMPs, TPFMS AUM (excluding fund-of-funds) must be included.

• Any KMP changes must be carried out in the manner specified by IFSCA.

5. Additional Net Worth Requirement (Regulation 107F)

• FMEs offering TPFMS must maintain an additional net worth of USD 500,000, distinct from other regulatory capital requirements.

6. Schemes under TPFMS (Regulation 107G)

• Only Restricted Schemes may be managed under TPFMS.

• Each such scheme must not exceed USD 50 million corpus, unless otherwise permitted by IFSCA.

• The third-party is deemed an “associate” of the FME for certain compliance obligations under Regulations 35 and 40.

7. Eligibility of Third-Party Fund Managers (Regulation 107H)

• Must be incorporated in India, IFSC, or a foreign jurisdiction.

• Must allocate adequate operational resources.

• Must have qualified and experienced responsible officers.

• Must meet the fit-and-proper criteria under Regulation 9.

8. Disclosures to Investors (Regulation 107I)

• In addition to Regulation 36 disclosures, FMEs must provide specific TPFMS disclosures in the placement memorandum, including:

  • Details of the third-party and its key personnel.

  • Division of responsibilities between FME and third-party.

  • Potential conflicts of interest and mitigation measures.

  • Any other disclosures required by IFSCA.

9. Risk Management (Regulation 107J)

• FMEs must establish a robust risk management framework, including:

  • Internal policies covering TPFMS-specific risks and conflicts.

  • Segregation of funds and operational independence for all schemes.

  • Extension of grievance redressal for TPFMS investors.

  • Internal audit/review mechanisms with reporting to fiduciaries.

  • Other measures as specified by IFSCA.

10. Ongoing Responsibilities of FMEs (Regulation 107K)FMEs are required to:

• Verify third-party eligibility and qualifications.

• Assume full liability for third-party conduct and performance.

• Monitor operations and issue directives where necessary.

• Retain the right to terminate arrangements in investor interest or on IFSCA’s directions.

• Put in place indemnity mechanisms.

• Ensure timely fee payments and compliance with additional IFSCA conditions.

11. Applicability of Existing Regulations (Regulations 107L–107M)

• All provisions of the principal Fund Management Regulations and related circulars apply mutatis mutandis to FMEs offering TPFMS.

• Exemption: Provisions do not apply where a parent/associate only provides support or advisory functions without engaging in fund management.

Consultation Paper on Draft IFSCA (Performance Review Committee) (Amendment) Regulations, 2025

Overview

The International Financial Services Centres Authority (IFSCA) has issued a consultation paper proposing amendments to the IFSCA (Performance Review Committee) Regulations, 2022. These changes follow the mandatory three-year review cycle under the IFSCA (Procedure for Making Regulations and Subsidiary Instructions) Regulations, 2025 and are intended to strengthen the structure, independence, ethics, and governance of the Performance Review Committee (PRC).]

Stakeholders, including regulated entities, market participants, and the public, have been invited to submit comments by September 17, 2025.

Section 17 of the IFSCA Act, 2019 mandates constitution of the Performance Review Committee (PRC) to assess whether the Authority complies with applicable laws, promotes transparency and good governance, and manages risks effectively. The PRC Regulations were first notified in March 2022 and, following the review cycle under the 2025 procedural framework, are now proposed to be amended with a focus on the committee’s constitution, eligibility criteria for independent experts, and adoption of a code of conduct for its members.

Key Provisions / Proposed Amendments

1. Constitution and Membership of the PRC

• Flexibility in composition: “two members” replaced with “at least two members” (Reg. 3(1)(i)).

• Simplification of roles: deletion of “for each review function” in Reg. 3(1)(ii).

2. Eligibility of Independent Experts (New proviso to Reg. 3(2))Disqualifications introduced for individuals who:

• Are 75 years or older on appointment date.

• Have been adjudged insolvent.

• Have been convicted for offences with imprisonment of 180 days or more.

• Are mentally/physically incapacitated.

• Have a material conflict of interest that cannot be resolved.

3. Resignation Protocol (New Reg. 3(4))

·       Members may resign with six weeks’ written notice.

·       Resignation effective upon Board’s acceptance.

4. Code of Conduct (New Reg. 3A)

• Mandatory Declaration of Fidelity and Secrecy (as per new Schedule).

• Members must act with integrity, impartiality, and confidentiality, disclose conflicts, and uphold public probity.

• Members shall maintain the highest standards of probity, consistent with public office.

5. Meeting Procedures

• Frequency: Reduced from two meetings per year to one annually, unless otherwise required (Reg. 8(1)).

• Quorum (Reg. 8(2)): at least 50% of total strength, including:

  • One member from IFSCA; and

  • One independent expert.

• Decision-making (New Reg. 8(2A)): One vote per member; Chairperson holds casting vote in case of tie.

6. Editorial & Technical Amendments

• Reg. 9: Clauses renumbered (a–e : 1–5).

• Reg. 10(1): Deletion of “containing the findings of each review area” for flexible reporting.

• Reg. 10(2): Alignment in drafting— “section 17(2)” replaced with “sub-section (2) of section 17”.

7. Schedule – Declaration of Fidelity and Secrecy

• New Schedule added requiring all PRC members to sign a confidentiality and ethical conduct declaration upon appointment.

8. Submission of Comments

• Feedback to be submitted in MS Word or MS Excel format, as per the template in the consultation paper.

• Deadline: September 17, 2025.

Enablers for Trade Finance in IFSC

Overview

Trade finance underpins nearly 80% of global trade, but a widening financing gap has underscored the need for stronger ecosystems. According to the Asian Development Bank (ADB), this global trade finance gap has grown from USD 1.5 trillion in 2018 to over USD 2 trillion in 2023. India is positioning the IFSC in GIFT City as a major hub for trade finance. In FY 2024–25, India’s exports stood at USD 824.9 billion, and the government has set an ambitious export target of USD 2 trillion annually by 2030. Achieving this will require enhanced competitiveness in goods and services as well as accelerated access to trade finance instruments. The IFSCA’s press release highlights the regulatory measures, institutional enablers, and policy initiatives introduced to facilitate trade finance activities and global integration.

Key Highlights

1. Regulatory Framework for IFSC Banking Units (IBUs)

• Indian and foreign banks may establish IBUs in branch form at GIFT IFSC.

• IBUs provide trade credit, factoring, forfaiting, multicurrency syndicated loans.

• Support exporters in opening foreign currency accounts with overseas banks.

• Exporters and importers can also access risk management instruments such as foreign exchange and interest rate derivatives, enabling hedging of exposures and predictability of cash flows.

• IBUs play a pivotal role in connecting clients to global pools of capital through cross-border financing and syndicated lending.

• Outstanding trade finance (June 2025): USD 13.79 billion.

2. Finance Companies (Finance Company Regulations, 2021)

·       Entities may register under IFSCA (Finance Company) Regulations, 2021 and/or Factoring Regulation Act, 2011.

• Permitted to lend, factor, forfait, and undertake trade-finance related services.

• 2024 reforms: Registration of Factors and Assignment of Receivables Regulations introduced to strengthen factoring framework.

  FY 2024-25: 4 finance companies active, including EXIM Bank subsidiary; trade finance volumes at USD 9.38 million.

3. International Trade Financing Services (ITFS) Platforms

• Fully digital, licensed platforms for factoring, forfaiting, bill discounting, and supply chain finance.

• Enable transparent price discovery through competitive bidding.

• Can interconnect with domestic and international platforms for secondary market operations.

• 4 entities operational, facilitating USD 29.79 million in FY 2024-25.

4. Global Integration

• IFSCA in advanced talks with Factors Chain International (FCI) to link IFSC entities with global receivables finance networks.

• This collaboration will expand access to international factoring networks and strengthen India’s integration with the global trade finance ecosystem.

5. Sustainable Trade Finance

• Mandatory allocation of at least 5% of prior year’s outstanding loans by IFSC lending institutions to sustainable/green trade finance.

• Supports India’s ESG commitments and sustainable supply chains.

6. Capital Raising through Bonds

• IFSC stock exchanges may list foreign currency and INR-denominated bonds.

• Non-resident investors enjoy a 9% concessional withholding tax on interest, improving post-tax yields.

• This positions GIFT City as a preferred destination for capital raising and supports India’s vision of building a world-class financial hub.

7. Insurance and Risk Mitigation (IIOs)

• IFSC Insurance Offices may offer trade credit and political risk insurance, covering:

  • Credit risk

  • Political risk

  • Non-acceptance risk

  • Re-shipment and re-import risks

• IIOs also provide exporters with risk assessment and advisory services.

Extension of Deadline for Compliance with Principal Officer and Compliance Officer Norms under IFSCA (CMI) Regulations, 2025

IFSCA Circular No. IFSCA-PLNP/80/2024-Capital Markets, dated September 04, 2025

Overview

The International Financial Services Centres Authority (IFSCA) has extended the compliance deadline for principal officer and compliance officer eligibility norms under the IFSCA (Capital Market Intermediaries) Regulations, 2025 (CMI Regulations). The move follows industry representations and aims to ensure smooth transition, operational continuity, and ease of doing business within the IFSC.

Background

• CMI Regulations, 2025 (effective April 16, 2025) repealed the earlier 2021 regulations.

• They introduced revised eligibility and appointment norms for principal officers and compliance officers under Regulations 9(2), 9(3), and 9(8).

• Earlier timeline: October 01, 2025 compliance deadline for existing registered intermediaries.

  
  

Extension Granted

• New Deadline: December 31, 2025

• Applicability: All capital market intermediaries registered with IFSCA.

• The extension specifically applies to the implementation of sub-regulations (2), (3) and (8) of Regulation 9 of the CMI Regulations.

• The circular has been issued pursuant to representations received from market participants, with the objective of ensuring continuity in operations and promoting ease of doing business.