Consultation Paper on Dematerialisation of Securities by IFSC Entities
Date: October 27, 2025
Issued by: International Financial Services Centres Authority (IFSCA)
📘 Objective
The IFSCA has issued a consultation paper seeking public comments on the proposed framework for mandatory dematerialisation of securities by entities operating within the IFSC jurisdiction (GIFT City). The proposal aims to streamline the regulatory framework and ensure uniformity in demat processes across IFSC entities.
🧩 Background
Currently, India International Depository IFSC Ltd is designated as the issuing agency for International Securities Identification Numbers (ISINs) within GIFT City.
However, IFSCA has observed that some IFSC-registered entities continue to obtain ISINs and hold securities with domestic depositories (such as NSDL or CDSL), even when those securities are issued from within the IFSC.
To correct this regulatory divergence, IFSCA proposes a unified framework requiring all IFSC entities to obtain ISINs through a depository registered with IFSCA.
⚖️ Legal and Regulatory Basis
Section 23G, Depositories Act, 1996 – Empowers IFSCA to regulate depositories in IFSCs.
Regulation 44, IFSCA (Market Infrastructure Institutions) Regulations, 2021 – Permits securities and other financial products in IFSC to be held in dematerialised form with an IFSCA-registered depository.
Regulation 72 – Authorises IFSCA to issue norms and circulars governing Market Infrastructure Institutions (MIIs).
📜 Key Proposals
1. Mandatory ISINs through IFSC Depositories
All entities operating in IFSC shall obtain ISINs from IFSCA-registered depositories for dematerialisation of securities and financial products.
Note: Entities may still use International Central Securities Depositories (ICSDs) for issuance and listing, as allowed under the IFSCA (Listing) Regulations, 2024.
2. Migration Deadline
Existing IFSC entities that have dematerialised their securities with domestic depositories must migrate to an IFSC depository by March 31, 2026.
3. Depository Responsibilities
Ensure seamless migration from domestic depositories.
Provide clear disclosures and procedural guidance to issuers and investors.
4. Compliance Reporting
IFSC depositories must submit a compliance report to IFSCA by April 30, 2026, confirming the migration status of all entities.
🗓️ Call for Public Comments
Stakeholders and members of the public are invited to submit comments on the draft circular titled “Dematerialisation of Securities by Entities in the IFSC”.
Deadline: November 16, 2025
Email submissions to:
Mr. Saurabh Kumar, Manager, IFSCA – saurabh.kumar1@ifsca.gov.in
Copy to:
Mr. Pawan Kumar Chowdhary, DGM – pawan.kc@ifsca.gov.in
Mr. Arjun Prasad, GM – arjun.pd@ifsca.gov.in
🧠 Implications for IFSC Entities
This move represents a significant step toward:
Strengthening the IFSC market infrastructure,
Promoting regulatory coherence, and
Enhancing ease of doing business for global participants operating in GIFT City.
Entities currently using domestic depositories should begin early coordination with IFSC-registered depositories to ensure a smooth transition before the March 2026 deadline.