The International Financial Services Centres Authority (IFSCA) has proposed expanding the list of foreign jurisdictions from which registered distributors in GIFT IFSC can distribute capital market products to retail and other investors.
In a recent consultation paper, the regulator has proposed adding the UAE, Singapore, Australia and the European Union (excluding Croatia) to the list of jurisdictions whose regulated financial products can be distributed to any category of clients through IFSCA-registered distributors.
Existing framework limits retail distribution
Currently, registered distributors can distribute capital market products originating from India, IFSC and seven identified foreign jurisdictions, including the US, UK, Canada, France, Germany, Japan and South Korea to retail and institutional investors.
On the other hand, the products originating from other foreign jurisdictions can only be distributed to sophisticated or accredited investors.
Rationale for change
The regulator said that the market participants have sought the inclusion of jurisdictions such as Luxembourg and Ireland, which are among the world’s largest fund domiciles but are currently excluded from the identified jurisdictions list.
According to IFSCA, the Undertakings for Collective Investment in Transferable Securities (UCITS) funds domiciled in the UK, France and Germany are already eligible for wider distribution but similar funds established in Luxembourg and Ireland are not, although they have a wider global prominence.
Industry participants have argued that expanding the list would improve GIFT IFSC’s competitiveness against other international financial centres and increase global investment choices for investors.
Inclusion of the rest of global funds industry
The consultation paper cites IOSCO’s latest global investment fund statistics to underline the changing global fund landscape. Luxembourg ranks as the world’s second-largest domicile for open-ended funds with over 12,900 funds managing assets of around USD 5.2 trillion while Ireland ranks fourth with nearly USD 3.8 trillion in assets. it also tops the list globally for closed-ended funds by assets under management.
IFSCA observed that several major global fund jurisdictions remain outside the current framework for retail distribution.
Alignment with V-CIP framework
Instead of immediately including all requested jurisdictions, the regulator has proposed adding jurisdictions already recognized under its Video Customer Identification Process (V-CIP) framework. These include UAE, Singapore, Australia and European Union (excluding Croatia).
The regulator said aligning the distribution framework with the existing V-CIP framework would facilitate cross-border investments while remaining consistent with applicable legal and regulatory requirements across jurisdictions.
Boost for GIFT IFSC distributors
IFSCA believes the proposal could significantly enhance business opportunities for Registered Distributors operating from GIFT City.
The regulator noted that distributors merely facilitate access between issuers and investors while distribution activities will continue to remain subject to the regulatory requirements
IFSCA has invited comments from stakeholders on the proposal. Suggestions can be submitted until August 7, 2026, after which the regulator will consider the feedback before finalising the amendments to the Master Circular for Distributors in IFSC.
