IFSCA Proposes Mandatory Dematerialization for IFSC Securities

The IFSCA has released a consultation paper proposing mandatory dematerialization of securities for IFSC entities to enhance regulatory coherence and streamline market operations within GIFT City. Entities will transition to IFSC-registered depositories by March 2026. Public comments are invited by November 2025.

The International Financial Services Centres Authority (IFSCA) has unveiled a consultation paper proposing the compulsory dematerialization of securities for entities within the International Financial Services Centre (IFSC). This initiative is designed to bolster regulatory cohesiveness and optimize market infrastructure in GIFT City.

The paper mandates that IFSC-based entities acquire International Securities Identification Numbers (ISINs) from IFSCA-registered depositories, moving away from domestic options. Despite residing within the IFSC, some companies persist in using India's domestic depositories, prompting this regulatory alignment to ensure consistency in securities management across the jurisdiction.

The designated agency for ISIN issuance in GIFT City is the India International Depository IFSC Ltd. However, the continued reliance on domestic markets by several IFSC entities has led to the proposal that all securities should be dematerialized through IFSCA-authorized depositories. Entities are required to transition by March 31, 2026, with submission of compliance confirmation by April 30, 2026. The IFSCA has invited feedback from the public and stakeholders, urging submissions by November 16, 2025.

(With inputs from agencies.)