Transforming Financial Services in IFSC

OVERVIEW

• IFSCA has revised the eligibility criteria for Remote Trading Participants on IFSC stock exchanges.
• Foreign entities regulated by their home country or members of approved exchanges can now trade in IFSC on a proprietary basis.
• Stock exchanges are responsible for onboarding, setting compliance norms, and reporting implementation in the Monthly Development Report (MDR).

eligibility criteria

• Regulated entities must be supervised by their home country’s securities authority, which must have an IOSCO-MoU or an MoU with IFSCA.
• These entities cannot be from countries listed as high-risk by the FATF and are restricted to proprietary trading, meaning they cannot onboard clients.
• Non-regulated entities must be members of approved stock exchanges and follow the same trading and compliance rules as regulated entities.
• Indian-incorporated entities are not eligible to participate as Remote Trading Participants (RTPs).

Trading & Compliance

• RTPs can trade only cash-settled derivatives, with all trades cleared through an IFSCA-registered clearing member for regulatory oversight.
• Stock exchanges must onboard RTPs per IFSCA’s AML/KYC guidelines to ensure compliance with anti-money laundering and counter-terrorist financing rules.
• They must also establish net-worth criteria, security deposits, and applicable fees for RTPs.
• Stock exchanges must enforce risk management and compliance measures to maintain market integrity and regulatory adherence.

conclusion

• The revised RTP framework strengthens global market participation while upholding regulatory integrity.
• Refined eligibility and compliance rules improve market access for foreign entities while ensuring strict oversight.
• Stock exchanges’ role in onboarding and risk management strengthens IFSC as a competitive, well-regulated financial hub.