IFSCA Proposes New Rules for Model Portfolios in GIFT City!

The International Financial Services Centres Authority (IFSCA) has proposed allowing registered research entities in GIFT City to offer model portfolios, subject to specific disclosure and operational requirements, as per Business Standard news report.  

The proposal is to expand the range of research products available to investors in the International Financial Services Centre (IFSC). 

In a consultation paper issued on Monday, the regulator proposed including model portfolios within the scope of research recommendations under the Capital Market Intermediaries (CMI) Regulations, 2025. 

Registration and Disclosure Requirements 

Under the proposed framework, broker-dealers and other entities seeking to offer model portfolios would first have to register as research entities. These portfolios would comprise baskets of securities carrying specific weightages, structured around investment themes or strategies. 

Research reports would need to disclose the geographical markets covered, asset classes, underlying themes and the methodology used to select securities. They would also have to state the investment rationale and recommended investment horizon. 

The regulator has proposed mandatory risk disclosures and a predefined schedule for portfolio updates and rebalancing. If changes are made outside the scheduled intervals, research entities would have to communicate the reasons to clients. 

Performance Reporting and Asset Coverage 

IFSCA has also proposed that performance claims be compared consistently against relevant market indices. Compliance with the proposed requirements would fall under the existing compliance audit framework. 

The regulator expects model portfolios in GIFT City to have a largely global focus. These could include international equities, fixed-income exchange-traded funds (ETFs), commodity ETFs and other asset classes. 

At present, regulations permit research entities to publish or provide research reports on securities, but do not allow them to offer model portfolios.  

However, the consultation paper clarifies that a consolidated list of recommended securities without assigned weightages would not qualify as a model portfolio. 

Stakeholder Comments Invited 

The proposal follows representations from industry participants seeking permission to offer model portfolios in GIFT-IFSC. 

IFSCA has invited stakeholders to submit their comments on the proposed framework by November 30, 2026. The consultation will help the regulator assess the requirements before finalising the guidelines. 

Read More: India Proposes 2-Year Restrictions on Soda Ash Imports After 89% Rise in Shipments! 

Conclusion  

The consultation paper outlines the registration, disclosure and reporting requirements for research entities. IFSCA has set November 30, 2026, as the deadline for stakeholder comments. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.