On 8-7-2025, the International Financial Services Centres Authority (‘IFSCA’) notified the ‘International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025’ to establish a framework for TechFins and Ancillary Services Providers. These provisions aim to aid, help, assist, strengthen, support, directly or indirectly the entities, which are attendant upon or connected with the delivery of financial services. These Regulations came into effect on 10-7-2025.
Key Points of IFSCA (TechFin and Ancillary Services) Regulations, 2025:
- These Regulations are formulated based on the provisions of International Financial Services Centres Authority Act, 2019, services listed under Section 3(1)(e)(i)—(xi).
- All the Techfins and ancillary service providers are mandated to secure a certificate of registration before commencing operations under IFSC, and existing entity will be required to register within 12 months.
- All entities eligible to apply for registrations will be:
- Company or LLP in IFSC
- Branch of foreign-incorporated company or LLP
- Partnership firm under the Indian Partnership Act, 1932 with partners from professional statutory bodies
- It is also required that partners/promoters of these entities are not under the Financial Action Task Force (FATF) jurisdiction marked as “High-Risk Jurisdictions subject to call for action”.
- The Applications are to be submitted to the Authorities via SWIT portal with documents and fees, and any changes or rectifications in applications will be resolved within 30 days.
- These certificates will be valid unless suspended or cancelled by the Authority or voluntarily surrendered by the TechFin and Ancillary Service Provider.
- These Regulations state that principal officer, compliance officer, directors/ partners/ designated partners, and controlling shareholders of the registered TechFin and Ancillary Services Provider need to be ‘fit and proper’ persons, and abide by the Code of Conduct, always.
- Full-time IFSC based Principal Officer and Compliance officer will be appointed to manage policy adherence, records, regulatory updates and reports for the Board of Directors.
- As per Regulation 10, if the service recipients of these entities can be-
- non-residents, from FATF-compliant jurisdictions
- residents, only for setting up operations in IFSC or abroad
- All the transactional operations and balance sheets will be maintained in Specified Foreign Currency. A bank account in Indian Rupee INR will manage administrative and statutory expenses.
- IFSCA can relax strict enforcement to promote financial market development. To seek relaxation, entities can applications within 30 days.
- An Inspecting Authority will from time to time inspect books of accounts, records, documents, infrastructure, procedures and systems of a TechFin and Ancillary Service Provider, and reasonable actions will be taken in case of any default or contravention of provisions.
- Entities are obligated to pay annual and applicable regulatory fees as prescribed by IFSCA to maintain compliance.
