GIFT City Updates (January 2026)

CIRCULARS

• One-time window to extend the validity of Placement Memorandum under IFSCA (Fund Management) Regulations, 2025

On January 27, 2026, IFSCA granted a one-time window to Venture Capital Schemes and Restricted Schemes to extend the validity of their Placement Memoranda (PPMs) due to market-related fundraising delays. Under the IFSCA (Fund Management) Regulations, 2025, PPMs are valid for twelve months, with open-ended Restricted Schemes required to raise a minimum corpus of USD 3 million. Schemes whose PPMs have expired or are nearing expiry may apply for an extension within three months of the circular, subject to re-filing the PPM without material changes and payment of fifty per cent of the applicable filing fee, following which the PPM validity may be extended by six months. Open-ended Restricted Schemes that have commenced investments but failed to meet the minimum corpus may also avail the extension, with further extensions governed by the FM Regulations. Click here

• Procedure and clarifications on filing of scheme applications under Third-Party Fund Management Arrangements

On January 16, 2026, IFSCA issued a circular clarifying the procedure for filing scheme applications by Fund Management Entities authorised to provide third-party fund management services under the Fund Management Regulations, 2025. FMEs launching schemes on behalf of third-party fund managers are required to follow the existing scheme filing framework, along with additional disclosures relating to the third-party manager’s legal status, regulatory registration, beneficial ownership, governance structure, assets under management, compliance declarations, conflicts of interest, remuneration policies, and documentation evidencing the arrangement. All such scheme applications are to be filed through the IFSCA Single Window IT System, and the circular takes effect immediately. Click here

• Modifications and clarifications to IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022

On January 2, 2026, IFSCA issued a circular introducing wide-ranging modifications and clarifications to the AML, CFT and KYC Guidelines, 2022, including expansion of their applicability, recognition of IFSCA-registered KYC Registration Agencies, and consolidation of previously granted exemptions. The amendments strengthen customer due diligence, beneficial ownership verification, confidentiality of risk categorisation, and reporting obligations, while clarifying that accounts should not be restricted solely due to filing of suspicious transaction reports. The circular also facilitates Aadhaar-based e-KYC, refines KYC updation timelines, provides safeguards for persons with disabilities, and updates onboarding norms for low-risk NRI customers through V-CIP. Certain entities and activities, including Global In-House Centres and Financial Crime Compliance Service Providers, are exempted subject to risk-based assessments, and the modifications come into force with immediate effect. Click here

• Consolidated framework for import of gold and silver through IIBX by Qualified Jewellers, SEZ units, Advance Authorisation holders and India-UAE CEPA TRQ holders

On October 10, 2025 (updated on January 2, 2026), IFSCA issued a consolidated circular, rationalising the framework for import of gold and silver through the India International Bullion Exchange (IIBX). The circular relaxes eligibility norms for SEZ units with jewellery exports and Advance Authorisation holders, clarifies that import of silver bars under specified ITC (HS) codes does not require notification as a Qualified Jeweller, and revises eligibility, net worth and ongoing compliance requirements. It also governs imports of UAE Good Delivery gold under the India-UAE CEPA by notified TRQ holders and prescribes procedural, operational and AML/CFT safeguards relating to participation on IIBX, remittances, bullion depository receipts, surveillance and reporting, with immediate effect. Click here

• Relaxation of eligibility norms for import of gold and silver through IIBX

On January 2, 2026, IFSCA amended the consolidated framework governing import of gold and silver through IIBX to further relax eligibility norms. The amendments permit eligible SEZ units and entities holding valid Advance Authorisation issued by the DGFT to import gold or silver through IIBX, and clarify that entities importing silver bars under ITC (HS) Code 71069221 are not required to be notified as Qualified Jewellers. The circular revises net worth and compliance requirements, including lower thresholds for eligible SEZ units, and introduces a structured framework for participation by Advance Authorisation holders, aimed at improving market access while maintaining regulatory oversight. Click here

PRESS RELEASE

• Modifications to IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022

IFSCA has issued a circular dated January 02, 2026, notifying modifications and clarifications to the IFSCA (AML, CFT and KYC) Guidelines, 2022. The amendments have been introduced pursuant to stakeholder representations and to incorporate relevant Government directives. For ease of reference, all amendments issued up to date have been consolidated and published as “IFSCA (AML, CFT and KYC) Guidelines, 2022, updated as on January 02, 2026” on the IFSCA website.

Further, FAQs clarifying the scope and intent of provisions relating to the Video-based Customer Identification Process (V-CIP) have been issued and are available on the IFSCA website. Click here

PUBLIC CONSULTATION

• Alignment of Default List of Authorised Services with GST SAC Classification

The Department of Commerce has issued a public consultation proposing alignment of the Default List of Authorised Services for SEZ and IFSC units with the Services Accounting Code (SAC) classification under the GST regime. The existing list, framed under the Service Tax regime, has led to operational difficulties in endorsement of services and availing IGST exemptions due to mismatch with SAC-based invoicing, particularly for financial services procured by IFSC units from DTA suppliers. To address this, a draft revised list mapping authorised services to corresponding SAC codes has been released for consultation, with stakeholder comments invited by February 16, 2026. Click here

• Participation of IFSC Banking Units (IBUs) in Remote Booking Arrangements (RBA)

On January 22, 2026, IFSCA issued a consultation on draft directions governing participation of IFSC Banking Units (IBUs) in remote booking arrangements of their parent banks. While permitting IBUs to participate in RBAs involving trading book transactions and permitted banking book products, the draft expressly prohibits RBAs involving customer loans and deposits. The framework emphasises transparency, board-level approvals, clear business rationale, effective risk management, adequate resourcing, independent oversight, compensation mechanisms, and timely disclosure of changes to the Authority, while ensuring RBAs do not impede recovery or resolution planning. Comments on the draft directions have been invited by February 13, 2026. Click here

• Guidance Framework on Sustainable Deposits and Sustainable Lending and Investments

On January 21 2026, IFSCA issued a revised Guidance Framework on Sustainable Deposits and Sustainable Lending and Investments, expanding the scope beyond lending to include sustainable deposits, trade finance and investments, in line with evolving global standards. The framework permits IBUs to offer sustainable deposits with earmarked use of proceeds, introduces guidance on ESG investments and trade finance, and proposes a minimum deployment requirement of five per cent of annual lending and investments towards sustainable activities. Strong governance, third-party verification, impact reporting and enhanced disclosures are prescribed, with the framework proposed to come into effect from April 1, 2026. Stakeholder comments are invited by February 10, 2026. Click here

• Guidelines for Algorithmic Trading on Stock Exchanges in IFSC

On January 21, 2026, IFSCA released draft guidelines on algorithmic trading on IFSC stock exchanges to strengthen market integrity amid increased use of automated trading. The framework places primary responsibility on exchanges for approval, surveillance, system robustness and audit trails, while requiring market participants to implement pre-trade risk controls, real-time monitoring, kill switches, secure algorithm management and prior approval for modifications. Enhanced oversight through system audits, surveillance of abusive strategies and economic disincentives for excessive order-to-trade ratios is proposed, with the guidelines intended to take effect upon issuance and a three-month transition period. Public comments have been invited until February 11, 2026. Click here

NOTIFICATION

• Operating Lease of Oilfield Equipment Notified as Financial Product

On January 5, 2026, IFSCA issued a notification specifying operating lease arrangements, including hybrids of operating and financial leases, in respect of oilfield equipment as a “financial product” for the purposes of the International Financial Services Centres Authority Act, 2019. For this purpose, “oilfield equipment” has been defined to mean goods used in connection with an oilfield as specified in the list annexed to Notification No. 3/2017-Central Tax (Rate) dated June 28, 2017, and the term “oilfield” carries the meaning assigned under the Oilfields (Regulation and Development) Act, 1948. The notification comes into force with effect from the date of its publication in the Official Gazette. Click here

FREQUENTLY ASKED QUESTIONS (FAQs)

• FAQs on IFSCA (AML, CFT and KYC) Guidelines, 2022

IFSCA has issued FAQs to clarify the scope and implementation of the IFSCA (AML, CFT and KYC) Guidelines, 2022 for entities licensed, registered or authorised by it. The FAQs address key aspects including applicability, appointment of Designated Director and Principal Officer, AML/CFT/KYC policy requirements, customer due diligence, use of business facilitators, FIU-IND reporting and registration on the FINGate 2.0 portal, along with guidance on V-CIP, risk assessment for FMEs and AIFs, STR filing, and asset freezing procedures under UAPA and WMD laws. The FAQs are clarificatory and do not override the Guidelines or applicable laws. Click here

GUIDELINES

• IFSCA (AML, CFT and KYC) Guidelines, 2022 – updated as on January 02, 2026

On January 2, 2026, IFSCA updated its Anti-Money Laundering, Counter-Terrorist Financing and Know Your Customer (AML, CFT and KYC) Guidelines, 2022 to incorporate amendments and clarifications issued to date. The update expands exemptions to specified low-risk entities and activities, lowers beneficial ownership thresholds to 10% to strengthen transparency, and streamlines KYC through recognition of IFSC KRAs, mandatory CKYCR integration for certain entities, and acceptance of equivalent electronic documents. It also enhances V-CIP norms for Indian nationals and eligible NRIs, clarifies STR reporting by requiring prompt filing without account restrictions solely on such filing, and strengthens group-wide AML frameworks, while retaining risk-based compliance obligations. Click here

REGULATIONS

• IFSCA (Capital Market Intermediaries) Regulations, 2025, as amended up to January 12, 2026

On January 19, 2026, IFSCA amended the Capital Market Intermediaries Regulations, 2025 to introduce a unified registration framework enabling entities to obtain a single registration for multiple intermediary activities. The amendments broaden eligible qualifications for principal and compliance officers to include fintech and STEM disciplines, remove the requirement of foreign university recognition, and reduce the work experience requirement from ten to five years for graduate degree holders. Entities may appoint a common principal officer and compliance officer across activities, subject to a separate vertical head for distribution businesses. Custodian net worth requirements have been specified at USD 1 million, with existing custodians required to comply by June 30, 2026, and earlier custodian recognition circulars stand superseded. Click here

• IFSCA (Capital Market Intermediaries) (Amendment) Regulations, 2026

On January 13, 2026, IFSCA notified amendments to the Capital Market Intermediaries Regulations, 2025 formalising a unified registration framework for multiple intermediary activities. The amendments expand eligible educational qualifications to fintech and STEM fields, reduce the minimum experience requirement to five years for graduate degree holders, permit appointment of a common principal officer across intermediary activities, and allow a single compliance officer, subject to a separate distribution vertical head where applicable. The regulations also prescribe a minimum net worth of USD 1 million for custodians, with a transition period until June 30, 2026, and consolidate custodian-related provisions within the principal framework. Click here

• IFSCA (Performance Review Committee) Regulations 2022 (Amended up to 12.01.2026)

On January 12, 2026, IFSCA amended the Performance Review Committee Regulations, 2022 to strengthen the committee’s composition by mandating the presence of at least two independent experts, replacing the earlier cap-based approach. The amendment builds on earlier changes introduced in September 2025 relating to governance standards, quorum, resignation, conflict of interest safeguards and complaint handling, and is aimed at enhancing independent oversight of the Authority’s regulatory functioning, governance practices and risk management framework. Click here

• IFSCA (Performance Review Committee) (Amendment) Regulations, 2026

On January 8, 2026, IFSCA notified amendments to the Performance Review Committee Regulations, 2022 to strengthen the composition of the Committee. The amendment replaces the earlier provision of “up to two independent experts” with a requirement of “at least two independent experts from relevant fields.” The Regulations came into force on their publication in the Official Gazette on 5 January 2026. Click here

• IFSCA (Registration of Insurance Business) (Amendment) Regulations, 2026

On January 8, 2026, IFSCA notified amendments to the Registration of Insurance Business Regulations, 2021 to clarify the scope of entities eligible to act as Service Companies of Lloyd’s IFSC. The amended definition now expressly includes service companies registered in India and promoted by (i) Managing Agents of Lloyd’s, (ii) permitted group entities of Managing Agents or Members of Lloyd’s, and (iii) Indian companies meeting the prescribed regulatory criteria. Click here

• IFSCA (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services) (Amendment) Regulations, 2026

IFSCA has notified amendments to the Book-keeping, Accounting, Taxation and Financial Crime Compliance Services Regulations, 2024, with effect from 5 January 2026. The amendments omit regulation 12 from the principal regulations and make a consequential change to the Second Schedule by removing the reference to regulation 12 under item 5. These changes streamline the regulatory framework governing permitted services and related compliance requirements in IFSCs. Click here

• IFSCA (Global In-House Centres) Regulations, 2025

IFSCA has notified the Global In-House Centres (GIC) Regulations, 2025, effective 24 December 2025, replacing the 2020 framework. The regulations introduce a dedicated registration regime for GIC units in IFSCs, define eligible financial institution groups and operating models, and prescribe conditions for registration, permissible services, fit and proper requirements, reporting, inspections, and enforcement. The framework is aimed at positioning IFSCs as global hubs for high-value financial and allied services, while enabling onshoring of India-centric financial services currently undertaken offshore. Click here