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The International Financial Services Centres Authority (IFSCA) has issued a consultation paper seeking public comments on its proposal to make the dematerialization of securities mandatory for entities operating in the International Financial Services Centre (IFSC) jurisdiction. The move is aimed at strengthening regulatory coherence and simplifying market infrastructure within GIFT City.
According to the consultation paper sourced from IFSCA, the proposal requires entities established in the IFSC to obtain International Securities Identification Numbers (ISINs) from depositories registered with the IFSCA, rather than from domestic depositories. The paper notes that some companies in the IFSC still use domestic depositories in India to hold securities, despite being based in the IFSC. The authority said that this step will align regulatory practices and ensure consistency in how securities are recorded and managed across the jurisdiction. The paper highlights that India International Depository IFSC Ltd has been designated as the issuing agency for ISINs within GIFT City. However, several IFSC entities continue to use depositories located in India's domestic market. To address this, the IFSCA has proposed that all securities issued by IFSC-based entities be dematerialized through depositories registered under the authority. Under the proposed framework, entities that have already dematerialized their securities with domestic depositories will be required to migrate them to an IFSC-registered depository by March 31, 2026. To ensure smooth implementation, depositories in IFSCs will have to facilitate this transition with minimal disruption to issuers and investors and ensure transparency in the migration process. A compliance report confirming the completion of the migration will have to be submitted to IFSCA by April 30, 2026. The consultation paper invites feedback from the public and stakeholders. Comments can be submitted via email to the IFSCA by November 16, 2025. Announcing the consultation paper, IFSCA said on X, "IFSCA has issued a consultation paper to seek comments from the public on the proposal for dematerialization of securities by entities in the IFSC jurisdiction. Click the link below to access the consultation paper. Last date to provide comments Nov 16, 2025." The authority has also clarified that while entities will be required to obtain ISINs from IFSC depositories, they may continue using International Central Securities Depositories (ICSDs) for listing and issuance as permitted under existing IFSCA (Listing) Regulations, 2024. (ANI)
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