IFSCA Notifies Consolidated Market Abuse Framework for GIFT City Securities Market

Overview

• The International Financial Services Centres Authority (IFSCA) has notified the IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026 ("Market Abuse Regulations"), published in the Official Gazette.
• The Regulations lay down a single, consolidated framework for the prohibition of market abuse in the securities market at GIFT IFSC, with the stated objective of protecting the interests of investors and ensuring the integrity and orderly functioning of the market.
• The new rules also strengthen requirements around material non-public information, internal controls, disclosures and market conduct, giving listed entities and market participants a clearer compliance framework for maintaining fair and orderly securities markets.
• With this notification, the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 cease to apply in the IFSC. Insider trading and manipulative, fraudulent and unfair trade practices are now governed by one IFSC-specific rulebook.

New IFSCA Market Abuse Framework

• The regulations address a broad range of conduct that can distort market prices, create artificial demand or supply, or give an unfair advantage to market participants.
• The framework covers practices including:

1. Insider trading and dealing while in possession of material non-public information;
2. Fraudulent and manipulative transactions;
3. Artificially influencing supply, demand or prices;
4. Circular trading and other manipulative trading patterns;
5. Spoofing and similar order-based practices;
6. Dissemination of false or misleading information; and
7. Unauthorised transactions carried out on behalf of clients.

• The regulations also address repeated placement and cancellation of orders where the conduct is intended to artificially influence the supply, demand or price of securities.
• The framework further recognises that misleading information can be disseminated through both physical and digital channels, bringing communication-related market abuse within its scope.

Stricter Controls Around Material Non-Public Information

• A key component of the new framework is its treatment of material non-public information (MNPI).
• The Regulations restrict sharing or procuring MNPI except for legitimate purposes, duties or legal obligations.
• An insider cannot use MNPI to trade in the concerned securities or cause another person to trade on the basis of that information.
• Access controls, information-sharing protocols and employee trading policies should therefore be reviewed in light of the new framework.

Disclosure and Internal Compliance Requirements

• The new framework also places importance on preventive compliance mechanisms. Listed entities are required to maintain appropriate internal controls and a code of conduct to support compliance with the market-abuse regulations.
• The regulations also prescribe disclosure requirements for designated persons in specified circumstances, including where the value of securities transactions crosses the prescribed USD 25,000 threshold in a calendar quarter. The relevant disclosure is required within the prescribed timeline, including a two-trading-day reporting requirement.

Conclusion

• GIFT IFSC is being developed as India’s international financial services hub, with exchanges, financial institutions, fund managers and other regulated entities operating within its framework.
• As the securities market in GIFT IFSC expands, a clear and consolidated market-abuse regime becomes increasingly important. The new regulations provide market participants with a single framework covering conduct that was previously addressed through separate SEBI regulations applicable to the IFSC.
• The move should also provide greater clarity for regulated entities when designing their internal compliance, surveillance and information-management systems.