GIFT CITY Newsletter Update April 2026

FATF Flags High-Risk Jurisdictions, Expands Monitoring List in February 2026 Update

The Financial Action Task Force (FATF) has reaffirmed its vigilance over global financial systems, releasing its latest update on high-risk and monitored jurisdictions following its plenary held on February 13, 2026.

In its public statement titled “High-Risk Jurisdictions subject to a Call for Action,” the FATF urged member countries and financial institutions worldwide to impose countermeasures, targeted financial sanctions, and enhanced due diligence on three nations-Democratic People’s Republic of Korea (DPRK), Iran, and Myanmar-citing persistent and serious deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. 

Alongside, the FATF updated its “Jurisdictions under Increased Monitoring”-commonly referred to as the grey list-which includes countries working with the watchdog to address strategic shortcomings in their AML/CFT regimes. The current list comprises Algeria, Angola, Bolivia, Bulgaria, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Haiti, Kenya, Kuwait, Lao PDR, Lebanon, Monaco, Namibia, Nepal, Papua New Guinea, South Sudan, Syria, Venezuela, Vietnam, Virgin Islands (UK), and Yemen. 

Notably, Kuwait and Papua New Guinea have been newly added to this monitoring list following the February plenary, reflecting emerging concerns around regulatory gaps and enforcement challenges. 

The FATF clarified that while enhanced scrutiny is recommended, these classifications do not prohibit legitimate trade or business transactions with the listed jurisdictions. Instead, financial institutions are expected to adopt a risk-based approach, strengthening compliance and monitoring mechanisms in line with global standards.

The periodic FATF listings play a crucial role in safeguarding the international financial system by identifying vulnerabilities and compelling jurisdictions to strengthen their defenses against illicit financial flows, including money laundering and terrorism financing.

 

09 March 2026: IFSCA Wraps Up Open House Series to Strengthen SEZ Compliance at GIFT IFSC

The Office of the Administrator at International Financial Services Centres Authority (IFSCA) has successfully concluded a structured series of Open House Sessions aimed at improving clarity and compliance around SEZ regulations within GIFT City IFSC.

Launched on January 6, 2026, the initiative brought together over 230 regulated entities (REs) across 14 sessions, covering a wide spectrum of sectors including aircraft and ship leasing, fund management, banking, insurance, capital markets, fintech, and ancillary services.

The sessions served as a formal platform for industry participants to engage directly with the regulator, discuss operational challenges, and seek guidance on SEZ-related procedures. Key areas of focus included documentation standards, approval timelines, reporting obligations, and lifecycle compliance requirements. IFSCA also used the forum to clarify regulatory provisions and identify opportunities for procedural simplification.

Beyond SEZ-specific issues, the discussions extended to broader IFSCA regulatory frameworks, enabling a coordinated approach to cross-regulatory compliance. This helped address ambiguities and provided businesses with greater regulatory certainty.

The initiative underscores IFSCA’s commitment to fostering a transparent, responsive, and business-friendly ecosystem at GIFT IFSC. Notably, following the Central Government’s notification dated February 28, 2024, the Administrator at IFSCA now exercises the powers of the Development Commissioner under the SEZ Act, 2005-further strengthening its role in shaping the IFSC regulatory landscape.

 

16 March 2026: IFSCA Unveils Revamped FinTech Sandbox Framework to Accelerate Innovation in GIFT IFSC

The International Financial Services Centres Authority (IFSCA) has approved a revamped FinTech Sandbox Framework aimed at accelerating innovation within India’s GIFT IFSC ecosystem.

Building on its earlier 2022 sandbox guidelines, the updated framework reflects global fintech trends and incorporates feedback from industry participants. It introduces a more structured and inclusive approach to testing new financial products and solutions across sectors such as banking, capital markets, insurance, funds, pensions, commodities, and financial support services.

A key highlight of the revised framework is the expansion of eligibility. For the first time, individuals and groups affiliated with recognized academic institutions, incubators, and accelerators-both in India and other FATF-compliant jurisdictions-can participate. This move is expected to deepen collaboration between academia and the financial ecosystem while encouraging early-stage innovation.

The application process has also been streamlined into a two-stage digital system via the Single Window IT System (SWIT). Applicants will undergo a preliminary evaluation within 30 days, followed by a final assessment within 60 days, offering greater clarity and predictability.

Similarly, approvals will now follow a two-step structure. Selected applicants will first receive an In-Principle Approval (IPA), potentially with conditions such as onboarding a testing partner. Upon meeting these conditions, they will be granted a Limited Use Authorisation (LUA), enabling controlled market testing.

Importantly, the framework now allows fintech firms to explore market opportunities within IFSC for already developed products, marking a shift from pure experimentation to commercialization readiness.

Further, the scope of sandbox testing has been significantly broadened to include all financial services and products regulated-or proposed to be regulated-by IFSCA.

Overall, the updated framework is designed to strengthen innovation pipelines, expand participation, and facilitate real-world testing, positioning GIFT IFSC as a more dynamic global fintech hub.

 

19 March 2026: IFSCA Hosts Talent Summit 2026 to Position GIFT City as Global Talent Hub

The International Financial Services Centres Authority (IFSCA) successfully hosted the second edition of its flagship event, the IFSCA Talent Summit 2026, on March 19, 2026, at GIFT City, Gandhinagar. Building on the momentum of its inaugural edition in 2024, the summit reinforced India’s ambition to establish GIFT City as a leading global financial and talent hub.  Organised under the theme “Shaping Global Talent for India and the World,” the summit focused on developing a future-ready workforce to support the rapidly evolving financial services ecosystem. The initiative aligns with the Government of India’s broader vision of transforming GIFT IFSC into a world-class international financial centre.  The event witnessed participation from key policymakers, industry leaders, and academic institutions. Among the distinguished attendees were Harsh Sanghavi, P. K. Mishra, K. Rajaraman, Uday Kotak, and Rishad Premji, along with senior government officials, CXOs, and academic leaders from India and abroad. 

In his address, Harsh Sanghavi highlighted GIFT City’s transformation into a symbol of Gujarat’s progressive growth and reiterated the government’s commitment to creating a holistic “Work and Live in GIFT City” ecosystem. P. K. Mishra emphasized India’s emergence as a trusted global partner and underscored the importance of human capital development in achieving the vision of Viksit Bharat 2047. 

IFSCA Chairperson K. Rajaraman stressed the critical role of a skilled workforce in positioning GIFT IFSC as a global financial hub, supported by progressive tax and regulatory frameworks. Uday Kotak reflected on the long-term vision behind GIFT City and outlined key structural drivers, including regulatory coherence and ease of living, that will support its global competitiveness. 

Rishad Premji highlighted the growing importance of digital transformation, continuous learning, and industry–academia collaboration, noting that India is poised to become a global talent destination in an AI-driven world. 

The summit featured multiple panel discussions and strategic announcements, including new academic programmes by international universities and employment generation initiatives within GIFT IFSC. Key discussions revolved around global career opportunities, the development of a tri-city knowledge corridor across Ahmedabad, Gandhinagar, and GIFT City, and the role of foreign universities in delivering industry-relevant education.  Overall, the event served as a significant platform for fostering collaboration between industry, academia, and policymakers, reinforcing GIFT IFSC’s positioning as a global hub for financial services talent and innovation. 

19 March 2026: IFSCA Tightens Oversight on Capital Market Intermediaries in GIFT IFSC; Flags Compliance Gaps

The International Financial Services Centres Authority (IFSCA) has intensified its supervisory oversight of Capital Market Intermediaries (CMIs) operating within the GIFT International Financial Services Centre (IFSC), as part of its ongoing efforts to ensure regulatory compliance and operational substance in the jurisdiction. As part of these efforts, the regulator has undertaken multiple rounds of market intelligence visits to the registered office premises of CMIs. These inspections were aimed at verifying the actual presence of key managerial personnel, including Principal Officers and Compliance Officers, as well as assessing the adequacy of infrastructure in line with the provisions of the IFSCA Capital Market Intermediaries Regulations, 2025. During these visits, IFSCA identified several instances of non-compliance across intermediaries.

A number of CMIs were found to be either closed or unattended during business hours on multiple occasions, raising concerns around operational legitimacy. In several cases, neither the Principal Officer nor the Compliance Officer was present at the premises, and there was no authorised staff available to respond to regulatory queries. The regulator also observed instances where a single individual was assigned both roles-creating potential governance risks-and cases where prior warnings had not resulted in corrective action.

Further, IFSCA noted that some designated officers lacked adequate understanding of the applicable regulatory framework. In certain inspections, only back-office staff were present, indicating a lack of front-line operational oversight. Infrastructure deficiencies were another key concern, with some intermediaries lacking the necessary physical and operational setup required to conduct their business effectively. The regulator also flagged practices inconsistent with regulatory expectations. These included the use of remote access software such as Anydesk and Ultraviewer for trading activities, as well as situations where Compliance Officers were directly involved in trading operations-posing clear conflicts of interest.

IFSCA stated that these observations indicate violations of specific provisions under the CMI Regulations, particularly those relating to the presence of key managerial personnel within IFSC and the maintenance of adequate infrastructure. Following these findings, the Authority has initiated appropriate regulatory actions against the concerned intermediaries in accordance with the applicable framework. IFSCA has reiterated its directive to all CMIs to ensure genuine operational substance, strict adherence to regulatory requirements, and compliance with all circulars and guidelines. The regulator emphasized its continued commitment to upholding high standards of governance and fostering a transparent, robust financial ecosystem within the GIFT IFSC.

25 March 2026: IIBX Granted QCCP Status, Strengthens GIFT IFSC’s Global Bullion Ecosystem

In a significant step towards strengthening India’s international financial architecture, the India International Bullion Exchange (IFSC) Limited has been granted recognition to operate both as a bullion exchange and a bullion clearing corporation within the GIFT International Financial Services Centre (IFSC).

The recognition has been accorded by the International Financial Services Centres Authority under the framework of the Securities Contracts (Regulation) Act, 1956, along with the IFSCA Act and the IFSCA (Bullion Market) Regulations, 2025.

As part of this development, IIBX’s clearing arm has been granted the status of a Qualifying Central Counterparty (QCCP)-a globally recognized designation that reflects high standards of risk management, governance, and regulatory oversight. This status is particularly important for financial institutions, as exposures to QCCPs typically attract more favorable capital treatment under international banking norms.

The designation underscores that IIBX operates under a robust regulatory framework aligned with global best practices. Specifically, it adheres to the Principles for Financial Market Infrastructures (PFMIs) issued by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions. These principles, introduced in 2012, aim to enhance the safety, efficiency, and transparency of financial market infrastructures while reducing systemic risks.

IFSCA, being a member of IOSCO, has reiterated its commitment to implementing these global standards within the GIFT IFSC ecosystem.

Given its systemic importance, IIBX has also been designated as a Market Infrastructure Institution (MII), placing it under stringent regulatory supervision and oversight. This ensures continuous compliance with PFMI norms and reinforces confidence among global participants.

Overall, the QCCP recognition marks a key milestone in positioning GIFT IFSC as a credible and globally competitive hub for bullion trading and financial market infrastructure.