August 20, 2026 | AIF Services
SEBI has taken an important step towards simplifying KYC processes for financial entities operating in GIFT City.
Through its circular dated August 20, 2026, SEBI has formally specified the International Financial Services Centres Authority (IFSCA) under Regulation 16A(1) of the SEBI KYC Registration Agency (KRA) Regulations, 2011.
This enables entities regulated by IFSCA to access the systems of SEBI-registered KYC Registration Agencies (KRAs) for undertaking KYC of their clients.
What has SEBI changed?
Regulation 16A(1) of the SEBI KRA Regulations allows entities regulated by other financial-sector regulators, when specified by SEBI, to access KRA systems for undertaking KYC of their clients.
SEBI has now specifically included IFSCA within this framework.
The immediate effect is that there can now be interoperability and information sharing between:
SEBI-registered KRAs ↔ IFSCA-regulated entities
This is particularly relevant for the growing ecosystem of funds, investment managers, financial institutions and other regulated entities operating from GIFT City / IFSC.
What does this mean for GIFT City investors?
An IFSCA-regulated entity can potentially use information already maintained within the SEBI KRA ecosystem when undertaking KYC of its clients.
This is significant because KYC information does not necessarily need to be treated as an entirely separate data set merely because the financial service is being provided from an IFSC.
For businesses building onboarding infrastructure for GIFT City, this creates the foundation for a more connected KYC workflow between the domestic securities-market KRA ecosystem and the IFSC ecosystem.
What about KYC compliance?
The circular is not simply an access permission.
SEBI has specifically stated that entities accessing the KRA system will be subject to the applicable provisions of the SEBI KRA Regulations. They must also follow SEBI’s Master Circular on Know Your Client (KYC) norms for the securities market, as amended from time to time.
Therefore, access to KRA data comes with corresponding compliance responsibilities.
For clients registered as Foreign Portfolio Investors (FPIs), additional data-security requirements under SEBI’s Master Circular dated May 30, 2024, also apply.
Why this matters for AIFs and fund managers
The development is particularly relevant for fund managers and investment platforms that operate across India and GIFT City.
A typical onboarding ecosystem may involve:
Investor → Fund / Manager → KYC → KRA → AML / Compliance → Investment
With the new framework, an IFSCA-regulated entity can be connected to the existing SEBI KRA infrastructure rather than operating in complete isolation.
This could help reduce:
Repetitive KYC data collection
Manual verification
Duplicate onboarding processes
Friction when investors move between regulated financial services
Operational complexity for fund administrators and compliance teams
However, the circular itself establishes the regulatory interoperability framework. It does not prescribe a particular API, commercial arrangement, onboarding process or technical implementation between an IFSCA-regulated entity and a particular KRA.
Those implementation details will therefore remain important for firms building actual onboarding workflows.
A bigger implication for GIFT City
This circular is more than a technical KYC change.
One of the challenges in building GIFT City into a globally competitive financial centre is ensuring that regulated financial infrastructure can interact efficiently with India’s existing financial ecosystem.
Allowing IFSCA-regulated entities to access SEBI KRA systems is a step towards that interoperability.
For fintech and fund-operations platforms, it also opens up the possibility of building a single KYC workflow spanning SEBI-regulated and IFSCA-regulated businesses, subject to the applicable regulatory and access requirements.
Effective immediately
SEBI has stated that the circular comes into force with immediate effect.
The takeaway
SEBI has effectively created the regulatory bridge for KRA information sharing between India’s SEBI-regulated KYC ecosystem and entities regulated by IFSCA.
For GIFT City funds, investment managers and financial institutions, the next important question is no longer just whether KRA information can be accessed — but how the operational and technical connectivity will be implemented in practice.
This could become an important building block for streamlined investor onboarding in the IFSC ecosystem.
Source: SEBI Circular HO/38/15/(7)2026-MIRSD-POD/I/19255/2026 dated August 20, 2026.