05 Jan 2026: SCA Updates AML, CFT and KYC Guidelines: Consolidated Version Issued (January 2026)<\/b><\/p>\n
The <\/span>International Financial Services Centres Authority (IFSCA)<\/b> has issued a circular dated <\/span>January 02, 2026<\/b>, introducing modifications to the <\/span>International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022<\/span><\/i>.<\/span><\/p>\n These changes have been notified following representations received from various stakeholders and market participants, and with the objective of providing greater regulatory clarity while aligning with relevant Government directives.<\/span><\/p>\n Key Developments<\/b><\/p>\n Why This Matters<\/b><\/p>\n The updated framework reinforces IFSCA\u2019s commitment to maintaining robust AML\/CFT standards in IFSCs while offering greater operational clarity to regulated entities. Market participants are advised to review the consolidated guidelines and FAQs carefully and align their internal policies and procedures accordingly.<\/span><\/p>\n <\/p>\n 21 Jan 2026: IFSCA Proposes Comprehensive Framework for Algorithmic Trading in IFSC<\/b><\/p>\n International Financial Services Centres Authority (IFSCA) has released a <\/span>consultation paper dated January 21, 2026<\/b>, proposing a detailed regulatory framework for <\/span>algorithmic trading on stock exchanges in IFSCs<\/b>. The move aims to strike a balance between encouraging market innovation and safeguarding market integrity amid the growing dominance of high-speed, automated trading systems.<\/span><\/p>\n Why Regulation Now?<\/b><\/p>\n Algorithmic trading-ranging from basic order-slicing programs to complex, high-frequency, multi-asset strategies-has become a major driver of global market liquidity. However, its rapid execution speed and opacity also pose risks such as:<\/span><\/p>\n IFSCA notes that global regulators have increasingly stepped in to mitigate these risks, making a dedicated framework for IFSC markets both timely and necessary.<\/span><\/p>\n Key Pillars of the Proposed Guidelines<\/b><\/p>\n The draft framework is anchored around <\/span>three core principles<\/b>:<\/span><\/p>\n <\/p>\n Strong Risk Management and Surveillance<\/b><\/p>\n The guidelines prescribe granular <\/span>order-level risk checks<\/b>, including price bands, quantity limits, order value caps, cumulative open order thresholds, and automated kill-switch mechanisms to prevent runaway trading. Persistent high Order-to-Trade Ratio (OTR) violations could attract financial disincentives and even temporary suspension of proprietary trading rights. Additionally, exchanges are required to maintain robust monitoring systems to identify dysfunctional algorithms and proactively prevent market disruptions.<\/span><\/p>\n Audits, Reporting, and Implementation<\/b><\/p>\n What\u2019s Next?<\/b><\/p>\n IFSCA has invited public and stakeholder comments on the proposed guidelines, with feedback due by <\/span>February 11, 2026<\/b>. The final framework is expected to play a key role in shaping a <\/span>transparent, resilient, and globally competitive algorithmic trading ecosystem<\/b> within India\u2019s IFSCs.<\/span><\/p>\n <\/p>\n 21 Jan 2026: India\u2019s Sustainable Finance Push Enters a New Phase: IFSCA Proposes Expanded Framework for Deposits, Lending and Investments<\/b><\/p>\n India\u2019s sustainable finance ecosystem is entering a more structured and scalable phase. The International Financial Services Centres Authority (IFSCA) has released a consultation paper proposing a significantly expanded <\/span>\u201cFramework for Sustainable Deposits and Sustainable Lending and Investments\u201d<\/b>, replacing the earlier 2022 guidance focused only on sustainable lending. The move reflects both the rapid globalisation of sustainable finance and India\u2019s ambition to position <\/span>GIFT IFSC as a credible international hub for green and transition capital<\/b>.<\/span><\/p>\n Global Context: Why Sustainable Finance Matters<\/b><\/p>\n Despite global wealth exceeding USD 450 trillion, the annual funding gap to achieve the UN Sustainable Development Goals remains over USD 4 trillion. Over the past decade, this has driven explosive growth in sustainable financial products-green loans, sustainability-linked loans, green and social bonds, ESG funds, and transition finance.<\/span><\/p>\n By mid-2025, global sustainable debt outstanding crossed USD 6 trillion, while sustainable syndicated loans exceeded USD 600 billion, with Europe and the Americas dominating issuance. Asia-Pacific, however, continues to gain momentum.<\/span><\/p>\n India\u2019s Progress So Far<\/b><\/p>\n India\u2019s sustainable finance market has expanded sharply. As of December 2024, cumulative green, social, sustainability and sustainability-linked (GSS+) debt issuance reached nearly USD 56 billion-up almost 3x since 2021. Green debt dominates issuance, accounting for more than 80%.<\/span><\/p>\n On the regulatory front, mandatory ESG disclosures (BRSR), RBI\u2019s climate-risk guidelines, sovereign green bonds, and green deposits by banks have steadily strengthened the ecosystem.<\/span><\/p>\n GIFT IFSC\u2019s Growing Role<\/b><\/p>\n GIFT IFSC has emerged as a meaningful platform for sustainable capital flows:<\/span><\/p>\n Against this backdrop, IFSCA\u2019s proposed framework aims to <\/span>move from intent to execution<\/b>.<\/span><\/p>\n What\u2019s New in the Proposed Framework?<\/b><\/p>\n The revised framework materially broadens the scope beyond lending:<\/span><\/p>\n These measures are designed to curb greenwashing and improve investor confidence.<\/span><\/p>\n Why This Matters<\/b><\/p>\n The proposed framework signals a clear regulatory intent: <\/span>sustainable finance is no longer optional or experimental at GIFT IFSC<\/b>. By combining deposits, lending, investments, targets, and verification under one umbrella, IFSCA is laying the groundwork for scalable, credible, and globally aligned sustainable finance activity.<\/span><\/p>\n If implemented effectively, the framework could:<\/span><\/p>\n What\u2019s Next?<\/b><\/p>\n IFSCA has invited stakeholder comments on the proposed framework, with feedback due by <\/span>February 10, 2026<\/b>. The final framework is expected to come into force from <\/span>April 1, 2026<\/b>.<\/span><\/p>\n For banks, funds, and issuers operating in IFSC, this marks an important moment to <\/span>embed sustainability into core strategy rather than treating it as a niche product<\/b>.<\/span><\/p>\n 22 Jan 2026: IFSCA Proposes Framework for Remote Booking by IFSC Banking Units<\/b><\/p>\n The <\/span>International Financial Services Centres Authority (IFSCA)<\/b> has issued a public consultation paper dated <\/span>January 22, 2026<\/b>, proposing a formal regulatory framework for <\/span>Remote Booking Arrangements (RBA)<\/b> involving IFSC Banking Units (IBUs).<\/span><\/p>\n What is Remote Booking?<\/b><\/p>\n Remote booking refers to the practice where financial transactions are executed or booked by an entity or employee located outside the jurisdiction where the business is originated. While such arrangements allow banks to optimise capital, talent, and operational efficiency through centralisation, they also introduce <\/span>additional regulatory, governance, and risk management challenges<\/b>, particularly across jurisdictions and time zones.<\/span><\/p>\n Why This Matters<\/b><\/p>\n With IFSCs positioning themselves as global financial hubs, IBUs are increasingly becoming part of cross-border booking models. IFSCA\u2019s proposed framework aims to ensure that such models remain <\/span>transparent, well-governed, and resilient<\/b>, without compromising regulatory oversight or resolution planning.<\/span><\/p>\n Key Proposals in the Draft Circular<\/b><\/p>\n Transition Timeline<\/b><\/p>\n\n
\n<\/span>\u201cIFSCA (AML, CFT and KYC) Guidelines, 2022 \u2013 updated as on January 02, 2026\u201d<\/span><\/i>.<\/span>
\n<\/span>This document supersedes earlier versions and serves as the single reference point for regulated entities.<\/span><\/li>\n
\n<\/span>To address interpretational issues and ensure uniform implementation, IFSCA has also issued <\/span>Frequently Asked Questions (FAQs)<\/b> covering the intent and scope of specific provisions related to V-CIP. These FAQs are available under <\/span>Point VI<\/b> of the document titled <\/span>\u201cFrequently Asked Questions (FAQs) on International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022\u201d<\/span><\/i>.<\/span><\/li>\n<\/ul>\n\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n