Introduction

The year 2015 marked a pivotal step for the future of financial regulation in
India and the initiation towards establishing India as a global financial
services hub at par with Singapore, Dubai and UK. Gujarat International
Finance Tec-City (Gift City) became India’s first International Financial
Service Centre (IFSC) making it a leading hub for alternate investment
funds (AIF) and diverse range of global financial services. This development
truly began with the advent of Special Economic Zones Act of 2005 but the
intricate nuances of such an establishment was truly realized in 2020 when
the International Financial Services Centers Authority (IFSCA) was
established under the IFSC Act of 2019. Before the IFSC Act, regulation
was controlled by respective financial sector regulators namely RBI, SEBI,
IRDA and PFRDA, etc. Now, Section 13 of the said act states that IFSCA will
be responsible for the regulation of financial products, financial services
and financial institutions and shall solely exercise all the powers and
functions exercised by the specific financial regulator.

IFSCA aims to provide a regulatory haven which is beneficial for Indian

IFSCs and permit a higher level of inter-regulatory collaboration within the
financial sector.1 This internationally comparable regulatory framework
benefits the registered entities including its branches (subject to permits) to
innovate, operate and thrive with a special offshore status within India. 2
Being a designated SEZ GIFT City has to simplified and business friendly
regulatory framework in terms of policy and regulatory governance, it has
also received several tax advantages due to its status as a showpiece
government project. Gift city provides the opportunity to establish
enterprises in banking, investment (including social impact and green
finance), insurance and reinsurance, capital markets and asset
management. It is also positioned as a leading destination to raise funds for
both the Indian and Foreign issuers and as a global hub for fintech start-
ups.
1
Cyril Amarchand Mangaldas, ‘Doing Business in IFSC’
(2021) [Link] accessed 20
September 2025.
2
International Financial Services Centres Authority, ‘IFSCA Overview’ (September 2020)
[Link] accessed 20 September 2025.
The main objective of this research paper is to examine whether the unified
regulatory framework of IFSCA signifies a genuine paradigm shift which
also reduces compliance costs, enhances regulatory effectiveness and
enhances capital flows compared to the SEBI’s domestic framework.
According to Thomas Samuel Kuhn, paradigm shift refers to the revolution
which challenges the already established practices and ultimately takes its
place, this usually happens when a dominant paradigm is found
incompatible with new data or norms facilitating a revised or completely
new paradigm.3 SEBI has evolved from a form based regulatory approach to
now a principle/risk based approach, 4 however, this framework is still
anchored in domestic priorities and the regulation specifically catered to
address India’s investor protection imperatives and economic development
needs in which regulatory independence remains a major issue. On the
other hand, IFSCA has unified and consolidated the regulatory powers of
four different regulator-RBI, SEBI, IRDA and PFRDA to a single institutional
framework, the end goal of this research paper would be to measure the
regulatory effectiveness that the unified framework has over the domestic
framework with specific regulation for specific sectors.

3
Thomas S Kuhn, The Structure of Scientific Revolutions (2nd edn, University of Chicago Press 1970).
4
Bhatt & Joshi Associates, ‘The SEBI Act of 1992: Foundation of India’s Securities Market Regulation’ (Bhatt & Joshi
Associates, 22 May 2025) [Link]
securities-market-regulation/ accessed 20 September 2025.
Comparative regulatory structure analysis
SEBI’s Domestic framework

India has a highly sophisticated framework for domestic financial regulation

intended to support the integrity, efficiency and stability of the financial
market. The highly fragmented framework has separate regulating
authority for each sector, they are,

1. Reserve Bank of India (RBI) – RBI performs the four basic functions of
management for the functioning of commercial banks, that is, planning,
directing, organizing and controlling to form a strong foundational base. 5
RBI is responsible devising strategies of monetary policy which drives the
economy, it influences the availability of credits, cost of borrowing and the
inflation level of the country; it is the apex body which sets rules, conducts
regular checks and ensures compliance from the commercial banks,
financial institutions and Non-Banking Financial Companies; RBI also plays
a crucial role in managing the currency fluctuations of the country and
oversees the country’s foreign exchange reserve which is currently valued
at around $702 billion;6 it also acts as the banker and debt manager of the
government of India.

2. Securities and Exchange Board of India (SEBI) – Established with

the aim to protect the interest of the investors in the securities market and
to facilitate the development and regulate the securities market. 7 It
oversees the financial market through regulations which sets disclosures,
5
Taxmann, “Reserve Bank of India (RBI) | Functions and Objective” Taxmann (Blog, 1 December 2023)
[Link] accessed 20 September 2025.
6
Press Information Bureau, ‘Factsheet: [Title of Factsheet]’ Government of India (webpage, [Date of Factsheet])
[Link] accessed 22 September 2025.
market conduct rules and rights to ensure transparency and accountability
monitoring both the Bombay Stock Exchange (BSE) and the National Stock
Exchange (NSE); it prevents frauds through insider trading investigations,
etc., it also provides grievance redressal mechanism through its online
portal called SCORES; it also conducts investor education and ensures
technological and infrastructure advancements.

3. Insurance Regulatory and Development Authority of India (IRDAI)

– IRDAI watches over the insurance sector of India and its main aim is to
maintain the financial strength of Indian insurers and protect the interests
of consumers and policyholders. The insurance apex body is directly
responsible for insurance regulations and compliances, issuing insurance
licenses and overseeing insurance companies annual and operational
performance and reviewing of the insurance products and services.

4. Pension Fund Regulatory and Development Authority (PFRDA) –

PFRDA functions with the aim “to promote old age income security by
establishing, developing, and regulating pension funds, to protect the
interests of subscribers to schemes of pension funds and for matters
connected therewith or incidental thereto.”8 Some of its schemes involve the
National Pension Scheme (NPS) and Atal Pension Yojana (APY), NPS has
over 165 lakh subscribers as of March 2025.9 It is directly responsible for
overseeing of the pension scheme and its regulation, acting as an
intermediary for licensing and supervision and spreading awareness
regarding pension.

IFSCA’s Unified Model

IFSCA was established under the IFSC Act, 2019, in which, for the first time
in India the regulatory powers of the four financial regulators mentioned
above were clubbed and vested solely to IFSCA which served as the unified
regulator of IFSC.

 Single Window IT System (SWIT)– Previously, setting up operation

in IFSC involved going through a large number of regulatory bodies
for approval, which involves the IFSCA itself, the SEZ and the specific
7
Securities and Exchange Board of India, ‘About SEBI’ SEBI (webpage, undated) [Link]
[Link] accessed 20 September 2025.
8
Pension Fund Regulatory and Development Authority, ‘About Us’ PFRDA (webpage, last updated 21 September
2025) [Link] accessed 20 September 2025.
9
Press Information Bureau, ‘New Private Subscribers Under NPS Cross 12 Lakh During 2024-25’ Ministry of Finance
(Press release, 22 April 2025) [Link] accessed 22
September 2025.
 financial sector regulators itself. With the introduction of SWIT, this
burden has been reduced. SWIT integrates all the relevant regulatory
bodies thereby becoming a one-stop solution for all the approvals. 10
This unified form contains all necessary information for obtaining the
No Objection Certificate (NOC) effortlessly. The system also has
integrated SEZ approval, GST registration, PAN’s, DIN’s and CIN’s
real time validation and a Digital Signature Certificate (DOC).
 Cross Sector Integration- One of the main benefits of IFSC lies in
its integration of the four financial regulatory which keeps it at par
with the global established hubs such as Hong Kong and Singapore.
While both these hubs function under multiple regulators, GIFT City
benefits from its unified structure under IFSCA which reduces
duplication, speeds up approvals and simplifies compliance
framework.11

Securities Listing and Compliance Framework

Comparison

Regulatory Framework

SEBI Listing Obligation and Disclosure Requirement (LODR) 2015, serves

as a thorough legislative foundation to improve the securities market’s
governance, accountability and transparency. It specifies the terms for
operation for companies whose securities are listed on the stock exchange.
It mandates disclosure requirements, financial reporting, related party
transactions, and it also ensures continuous monitoring and compliance. 12

10
Treelife, ‘IFSCAs Single-Window IT System SWiT: A Game-Changer for Businesses in GIFT City’ Treelife (webpage,
[date]) [Link]
accessed 20 September 2025.
11
Piyalee Bhattacharya and Asheesh Pandey, ‘GIFT City looks to challenge global financial hubs’ Policy Circle
(Opinion, 20 August 2025) [[Link]
[Link]/opinion/gift-city-global-financial-hub/) accessed 20 September 2025.
IFSCA ‘Listing’ Regulation, 2024, establishes the legal foundation for the
listing of financial products and securities on reputable stock exchanges
within IFSC, in GIFT City. These rules are created to conform to the
worldwide standards and best practices established by the IOSCO. 13 The
Standing Committee on Primary Markets (SCOP) has recommended that the
legal framework governing company listings ought to be in line with that of
global financial hubs like Singapore, Hong Kong, United States and the
United Kingdom.

Eligibility Criteria

SEBI LODR mandates the domestic companies to maintain a positive net in

each of the three immediately preceding financial years and the minimum
paid up capital of 10 crores but not more than 25 crores.14

IFSCA Listing regulation mandates an operating revenue of $ 20 million in

the last financial year or averaged over the last three financial year. A post
issue market capitalization of $25 million and a pre-tax profit of $ 1 million
is mandated which resonates with the global requirements.15

Offer Document Requirements

SEBI LODR follows the traditional regulatory method, which mandates for
full SEBI approval for public issuance whereas IFSCA follows a more
relaxed framework in which it exempts issuers with proposed offering sizes
of $50 million or less from seeking the observation letters.

International Comparative Analysis

Singapore: Monetary Authority of Singapore (MAS) Model

12
Uttarayan, ‘Key Features of SEBI LODR Regulations, 2015’ CFOAngle (blog, 11 April 2024)
[Link] accessed 22 September 2025.
13
International Financial Services Centres Authority, ‘Consultation Paper on Proposed IFSCA (Listing) Regulations,
2024’ (May 2024) [Link]
[Link] accessed 20 September 2025.
14
Eligibility Criteria – Public Issues: Main Board (Equity & Debt)” NSE India (webpage, updated 20 May 2025)
[Link] accessed 20
September 2025.
15
International Financial Services Centres Authority, ‘New IFSCA (Listing) Regulations, 2024 Come Into Effect’ (Press
Release, 30 August 2024) [Link]
[Link] accessed 20 September 2025.
MAS serves as both the central bank and integrated financial regulator of
Singapore. It unifies all banking, securities, insurance and monetary policy
operations to maintain the financial stability of the country. In contrast to
the traditional central banks, MAS is tasked with both overseeing the
financial institutions and guiding the nation towards becoming a major
international financial center. It is well known for its proactive approach to
fintech strategy and its all-encompassing approach to maintaining
macroeconomic stability.16 Its core regulatory functions include formulation
of the monetary policy, licensing and supervising the financial entities,
ensuring the AML/CFT compliance and the macroeconomic balance.

United Kingdom: Financial Conduct Authority (FCA) and Prudential

Regulation Authority (PRA) Model:

United Kingdom has a dual system for the regulation of the financial
institutions hailed as the “Twin Peaks” model. 17 FCA is a distinct and
independent regulator in charge of overseeing the conduct of business and
market matters for all companies, including the prudential supervision of
smaller businesses, such as financial advice firms and insurance
brokerages. PRA on the other hand is housed with the Bank of England and
is in charge of the stability and solvability of systematically significant
financial organizations. Its aim is to make sure that businesses can fail
without bringing down the entire financial system with them, rather than
trying to stop all firms from failure.

United Arab Emirates Model:

UAE has four different regulators which oversee the financial system of the
country. This includes Securities and Commodities Authority which oversees
the securities market of the country; the Central Bank of UAE which
regulates the banking activities; the Dubai Financial Services Authority
(DFSA) which oversees the Dubai International Financial Centre (DIFC);
and the Financial Services Regulatory Authority (FSRA), which oversees the

16
London Stock Exchange Group, ‘Monetary Authority of Singapore (MAS)’ LSEG Risk Intelligence (webpage,
undated) [Link] accessed 20 September
2025.
17
Chartered Insurance Institute, ‘Towards Twin Peaks: The UK’s Emerging Regulatory Landscape’ (Policy Briefing,
December 2012) [Link] accessed
20 September 2025.
Abu-Dhabi Global Market (ADGM).18 UAE follows a somewhat similar
structure to India.

18
Baker McKenzie, ‘Who Regulates Banking and Financial Services in Your Jurisdiction?’ (Global Financial Services
Regulatory Guide, undated) [Link]
regulatory-guide/europe-middle-east-and-africa/united-arab-emirates/topics/who-regulates-banking-and-
financial-services-in-your-jurisdiction accessed 20 September 2025.