The International Financial Services Centres Authority (IFSCA) has issued a comprehensive regulatory framework titled the IFSCA (TechFin and Ancillary Services) Regulations, 2025, aimed at bringing clarity and standardization to the operations of TechFin and Ancillary Service Providers (ASPs) in India’s International Financial Services Centres (IFSC), including GIFT City.
These regulations, published in the Gazette of India, seek to establish a robust ecosystem by defining eligibility, scope of services, compliance requirements, and supervisory powers for entities providing technological and support services that facilitate regulated financial activities.
Mandatory Registration Within 12 Months
According to the notification, no TechFin or ASP will be allowed to commence operations in the IFSC without a certificate of registration from the IFSCA. Existing entities, previously operating under circulars issued in 2021 (for ancillary services) and 2022 (for fintech), are now required to formally register under the new regime within 12 months, extendable up to 24 months in special cases.
The registration process must be carried out through IFSCA’s Single Window IT System (SWIT), and involves both in-principle approval and final certification upon compliance.
Who Can Apply?
Eligible applicants include companies or LLPs incorporated in the IFSC, branches of overseas entities, or firms recognized under the Indian Partnership Act. However, all promoters or partners must hail from jurisdictions not blacklisted by the Financial Action Task Force (FATF) as high-risk.
The framework also mandates that applicants appoint a Principal Officer and a Compliance Officer, both full-time employees based out of the IFSC. Exceptions apply for entities serving only group companies within IFSC.
‘Fit and Proper’ Criteria for Stakeholders
To ensure credibility and governance, the regulations outline strict fit-and-proper requirements for directors, shareholders, and key managerial personnel. Any individual with a past record of financial misconduct, insolvency, or regulatory penalties in the preceding five years is ineligible for key positions.
Defined Scope of Services
Two exhaustive schedules attached to the regulations define the range of permissible services:
- TechFin Services include AI/ML solutions, cybersecurity, blockchain (DLT), cloud computing, regtech, tokenization, IoT, Web 3.0, and other emerging technologies.
- Ancillary Services encompass legal and consulting, HR, audit, compliance, marketing, outsourcing (KPO, LPO), and financial reporting support.
A third schedule explicitly lists services that cannot be provided by registered entities—such as facility management, construction, or services not supporting core financial activities.
Currency & Reporting Norms
Entities must operate in designated foreign currencies, though INR accounts are allowed for administrative purposes. All financial reporting to IFSCA must be done in US dollars, unless otherwise specified.
Inspection, Enforcement & Exemptions
IFSCA retains powers to:
- Inspect books and operations of registered entities.
- Relax provisions in the interest of market development.
- Initiate action in case of regulatory breaches—post a fair hearing.
Additionally, the authority can issue further guidelines, circulars, and clarifications to remove ambiguities and operationalize the regulations effectively.
Old Frameworks to be Repealed
The earlier circulars of February 10, 2021, and April 27, 2022, will be formally repealed 24 months after the implementation of these regulations. Until then, existing entities will continue under their respective frameworks if they have not transitioned to the new regime.
A Step Towards Global Fintech Hub
These regulations represent a major push to establish GIFT City and other IFSCs as globally competitive fintech and financial services hubs. By aligning with international norms and offering a clear path for technology and support service providers, the IFSCA aims to attract greater cross-border participation in India’s financial sector.
Notification Details
Date: 8th July, 2025
Read More: Registered Will Carries Presumption of Genuineness: Supreme Court
