The India International Financial Services Centres Authority (IFSCA) published an update on its supervisory measures to assess whether capital market intermediaries (CMIs) operating in the GIFT International Financial Services Centre have adequate on-the-ground “substance”, and reported that some CMIs were found non-compliant during market intelligence visits. Based on these findings, IFSCA has initiated regulatory action against the CMIs concerned under the applicable framework. Multiple rounds of visits checked, among other things, the presence of the Principal Officer and Compliance Officer and the adequacy of infrastructure required under the IFSCA Capital Market Intermediaries Regulations, 2025. Key issues included premises being closed or unattended during business hours, absence of designated officers or authorised personnel to respond to supervisors, the same individual acting as both Principal Officer and Compliance Officer including repeated instances despite warnings or advisories, inadequate regulatory awareness among designated officers, inspections staffed only by back-office personnel, insufficient infrastructure, and practices described as inconsistent with local requirements such as trading via remote access software and the Compliance Officer also handling the trading desk, creating a conflict of interest. IFSCA linked the observations to non-compliance with requirements under Regulations 9(1), 9(6), 11(b) and clause 16 of Part A of Schedule II on the presence of designated key management personnel in the IFSC and maintenance of adequate operational infrastructure. IFSCA advised all CMIs to ensure substance and strict adherence to the 2025 regulations and the circulars and guidelines issued under them.

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