Regulatory Architecture Governing Listings in GIFT City: How the IFSCA Framework Is Structured

In almost every GIFT City listing mandate I’ve worked on, the first serious regulatory misstep happens before drafting even begins. Issuers and bankers assume there is a single “IFSCA regulation” that operates like SEBI ICDR, supplemented by exchange rules. That assumption quietly derails disclosure strategy, eligibility analysis, and regulator engagement. The reality is more nuanced. GIFT City listings are governed by a deliberately layered regulatory architecture where statutory authority, principle-based regulations, and exchange-level operating rules interact in a very specific hierarchy. Understanding how this architecture is structured is not academic. It directly determines how offer documents are drafted, how comments are raised, and how quickly a transaction moves from concept to listing.

What is the regulatory authority governing listings in GIFT City?

Listings in GIFT City are governed by the International Financial Services Centres Authority (IFSCA), a unified regulator that exercises exclusive jurisdiction over securities issuance, listing, intermediaries, and market conduct within International Financial Services Centres in India.

That single sentence hides a significant regulatory shift. Unlike India’s domestic capital markets—where regulation is fragmented between SEBI, RBI, MCA, and sectoral regulators—IFSCA consolidates regulatory power within IFSCs. For listings, this means IFSCA is not merely issuing regulations. It is the final authority on eligibility, disclosure adequacy, market integrity, and ongoing compliance. There is no parallel SEBI review, no fallback to domestic circulars, and no regulator-shopping. Everything flows from this unified structure.

For offer document drafting, this consolidation changes the psychology of regulation. IFSCA expects advisors to exercise judgment, not mechanically replicate Indian IPO disclosures. The framework is designed to work only if participants behave like offshore-market professionals.

The Foundational Layer: Statutory Authority and Jurisdictional Design

At the base of the regulatory architecture lies the IFSCA Act, 2019. From a drafting standpoint, this legislation rarely appears directly in offer documents, yet it shapes everything beneath it. The Act establishes IFSCA as the sole regulator for financial services conducted in IFSCs and explicitly overrides the jurisdiction of domestic regulators within that space.

What matters in practice is the jurisdictional clarity this creates. Once a security is proposed to be listed in GIFT City, the transaction exits the SEBI ecosystem entirely. This is not a dual-compliance regime. It is a clean substitution. Indian issuers often struggle with this because their internal compliance teams instinctively default to SEBI logic. In GIFT City, that instinct is usually counterproductive.

This statutory design also explains why IFSCA regulations are not overly prescriptive. The Act empowers IFSCA to regulate through principles rather than exhaustive rulebooks. That discretion flows directly into how listing regulations are drafted and enforced.

The Core Regulatory Layer: IFSCA Issuance and Listing Regulations

The Issuance and Listing of Securities Regulations issued by IFSCA form the core of the listing framework. These regulations define who can list, what can be listed, and under what broad conditions. However, they intentionally avoid providing a section-by-section disclosure template or a DRHP-style checklist.

This is a conscious architectural choice. IFSCA is positioning GIFT City alongside international financial centres, not as an extension of Indian public markets. The regulations therefore focus on outcomes rather than mechanics. They require that disclosures be true, fair, and adequate for investors, without dictating how many pages a business overview should have or where a particular risk factor must sit.

From a drafting perspective, this shifts responsibility squarely onto the issuer and its advisors. Materiality becomes the organising principle. Risk factors must reflect actual business and jurisdictional risks, not inherited boilerplate. Use of proceeds disclosures must explain commercial rationale, not merely allocation percentages. Corporate governance disclosures must align with international investor expectations, not minimum Indian law thresholds.

IFSCA reviews documents with this philosophy in mind. Comments are rarely about missing headings. They are about clarity, coherence, and whether the document genuinely enables informed investment decisions.

The Operational Layer: IFSC Exchange Regulations and Manuals

Below the IFSCA regulations sit the exchange-level frameworks issued by IFSC exchanges operating in GIFT City. These include listing regulations, operating manuals, disclosure guidelines, and procedural circulars. While subordinate to IFSCA regulations, these instruments are operationally critical.

This layer governs how documents are filed, how information is disseminated, how timelines are tracked, and how post-listing obligations are monitored. In live transactions, delays often arise not from regulatory objections but from misalignment with exchange processes. For example, inconsistencies between offer document disclosures and exchange disclosure templates can trigger re-submissions even when substantive disclosures are sound.

The key architectural point is that exchanges in GIFT City do not substitute IFSCA’s regulatory role. They operationalise it. IFSCA looks at substance. Exchanges look at process. Effective listing strategy requires anticipating both simultaneously.

Offshore Character and FEMA Interface Within the Architecture

One of the most misunderstood aspects of the GIFT City regulatory architecture is its offshore character. Although geographically located in India, IFSCs are treated as offshore jurisdictions for several regulatory purposes, particularly under FEMA.

IFSCA does not restate FEMA regulations, but it expects issuers to internalise them. Capital inflows, investor eligibility, currency denomination, and repatriation mechanics are all examined through an exchange-control lens. Weak or ambiguous FEMA-related disclosures are among the most common triggers for regulatory queries.

From a drafting standpoint, this means the offer document must clearly articulate how funds move in and out of India, how investor rights are protected, and how regulatory compliance is maintained across jurisdictions. This is not an add-on section. It is woven into the economic narrative of the transaction.

How IFSCA Actually Reviews Listing Documents

IFSCA’s review approach is shaped by the architecture described above. It does not behave like a domestic form-checking authority. It behaves like a market regulator focused on integrity and investor protection in an international setting.

In practice, this means IFSCA is more likely to question:
– whether risk disclosures reflect real operational exposure,
– whether issuer explanations demonstrate management understanding, and
– whether the overall document tells a coherent investment story.

Conversely, it is less concerned with stylistic conformity or inherited domestic-market phrasing. Advisors who approach the process defensively—by overloading documents with generic disclaimers—often attract more scrutiny, not less.

Regulatory Engagement and Advisory Responsibility

Another structural feature of the GIFT City framework is the comfort with direct engagement. IFSCA routinely interacts with issuers and advisors on eligibility interpretations, instrument structuring, and disclosure positioning. This transparency is a strength of the system, but it increases advisory responsibility.

There is little room for procedural opacity. Every drafting decision must be reasoned, defensible, and aligned with the architecture of the framework. In my experience, transactions that move smoothly are those where advisors treat IFSCA as a sophisticated counterpart, not as a checklist authority.

Closing Insight

The regulatory architecture governing listings in GIFT City is not complex because it has too many rules. It is complex because it is intentionally sparse. IFSCA has designed a framework that assumes professional judgment, international standards, and regulatory maturity. Issuers and advisors who understand this architecture early structure better instruments, draft cleaner documents, and face fewer regulatory surprises. Those who approach GIFT City as a lightly modified Indian IPO regime usually learn the hard way that it is something entirely different.

About the Author

Prashant Kumar is a Company Secretary and Partner at Eclectic Legal, specialising in drafting and reviewing offer documents, DRHPs, and Information Memoranda for listings in GIFT City (IFSC). He regularly advises issuers, lead managers, and intermediaries on IFSCA regulatory architecture, disclosure strategy, and cross-border listing structures.
📞 +91-9821008011 | ✉️ prashant@eclecticlegal.com

FAQs

1. Is SEBI involved in any stage of GIFT City listings?

No. SEBI has no jurisdiction over listings in IFSCs. Once a transaction is structured for GIFT City, IFSCA becomes the sole securities regulator. SEBI regulations may be referenced for familiarity, but they carry no legal force.

2. Are IFSCA listing regulations deliberately non-prescriptive?

Yes. The regulations are principle-based by design. IFSCA expects issuers and advisors to apply materiality and judgment rather than rely on rigid formats or checklists.

3. How important are exchange rules compared to IFSCA regulations?

Exchange rules are operationally critical but subordinate. They govern process and mechanics, while IFSCA regulations govern substance and disclosure philosophy.

4. Why do FEMA considerations matter so much in GIFT City listings?

Because IFSCs are treated as offshore jurisdictions for exchange-control purposes. Capital flow, investor eligibility, and repatriation disclosures are central to regulatory review.

5. Does IFSCA directly interact with issuers during review?

Yes. Direct engagement is common and expected. This increases transparency but also raises the bar for advisory quality and drafting judgment.