IFSCA Notifies Consolidated Market-Abuse Framework for GIFT City Securities Market

The International Financial Services Centres Authority (IFSCA) has announced a cohesive framework for market abuse in the GIFT City securities market, as per news reports. It merges insider trading and various fraudulent and manipulative practices under a single regulatory framework. 

The new framework is known as IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026. They are intended to protect investors and set out prohibited market conduct within the International Financial Services Centre. 

New Rules Replace Earlier SEBI Framework 

With the IFSCA regulation coming into effect, two SEBI frameworks which were applicable in IFSC shall no longer be effective in IFSC.  

They include Prohibition of Insider Trading Regulations, 2015 and Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations 2003. 

In fact, any violations can be dealt with IFSCA under the Act governing it. Its powers include issuing warnings or censure and suspending or cancelling registrations. 

Manipulative Trading Practices Covered 

The framework prohibits practices such as price and benchmark manipulation, circular trading, artificial demand, and fraudulent transactions. It also covers false or misleading information and unauthorised transactions carried out on behalf of clients. 

Repeatedly placing and cancelling orders without intending to execute them is specifically covered where the activity is meant to distort supply, demand or prices. False news circulated to influence investors' decisions is also prohibited. 

Insider Trading Restrictions Tightened 

People holding material non-public information cannot pass it on except for legitimate purposes, their duties or legal obligations. They are also barred from trading in the relevant securities or causing someone else to trade. 

Trades made while possessing such information will be presumed to have been based on it, subject to the defences provided under the regulations. 

Disclosure Rules for Designated Persons 

Designated persons, including controlling shareholders and directors, will have disclosure obligations. Trades above $25,000 during a quarter must be reported within two trading days. 

Listed entities must then inform exchanges and publish the disclosures on their websites within two working days of receiving them. 

Internal Controls Required for Listed Entities 

Listed entities must maintain internal controls and a code of conduct addressing market abuse.  

These measures cover the identification and confidentiality of material non-public information, restrictions on its communication, employee access and periodic review of the controls. 

Read More: Power Mech Projects Share Price Surges on Securing ₹970 Crore Order from Vedanta Power! 

Conclusion 

The new IFSCA framework brings several market-abuse provisions into one set of regulations for GIFT City. It also establishes specific requirements covering insider information, trading disclosures and internal controls. 

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.