IFSCA vs SEBI: Who Actually Regulates Your GIFT City Fund
By Anup Vatyani, AMFI-registered Mutual Fund Distributor (ARN 106715)
Updated
One of the most common points of confusion for first-time GIFT City investors: is this a SEBI-regulated product, like a domestic Indian mutual fund? The answer is no — and understanding who actually regulates your fund matters for knowing what protections and disclosure standards apply.
IFSCA: the regulator for GIFT City
The International Financial Services Centres Authority (IFSCA) is the unified regulator for all financial services within India's International Financial Services Centres, including GIFT City. It regulates banking, insurance, capital markets and fund management activity within the IFSC — including every Fund Management Entity (FME) operating a GIFT City fund. IFSCA was specifically created to give India's offshore financial centre its own regulatory framework, distinct from — though coordinated with — India's domestic regulators.
SEBI: the regulator for domestic Indian markets
The Securities and Exchange Board of India (SEBI) regulates India's domestic securities markets — this includes domestic mutual funds, listed equities, and India-based AIFs and PMS operating outside the IFSC. SEBI has no direct regulatory authority over GIFT City fund structures; that jurisdiction sits with IFSCA.
Why the distinction matters to you as an investor
IFSCA's regulatory framework for fund management (the IFSCA Fund Management Regulations) sets its own standards for FME registration, disclosure, and investor eligibility — modelled on, but not identical to, SEBI's domestic framework. Practically, this means the specific compliance and disclosure requirements you should expect from a GIFT City FME are IFSCA's, not SEBI's — so when checking a fund's credentials, you should confirm IFSCA registration status, not look for a SEBI mutual fund registration number.
A quick way to check
Ask any Fund Management Entity directly for their IFSCA registration details, and cross-check status on IFSCA's own public registers. This is a reasonable, standard question to ask before investing — a properly registered FME will have this information readily available.
For more on how GIFT City fits into India's broader investment landscape, see our What Is GIFT City page, or talk to Anup with any specific fund you're evaluating.
IFSCA and SEBI side by side
| IFSCA | SEBI | |
|---|---|---|
| Set up under | IFSCA Act, 2019; established 27 April 2020 | SEBI Act, 1992 |
| Where it regulates | Inside International Financial Services Centres (GIFT IFSC) | India's domestic securities markets |
| Scope | Banking, capital markets, insurance, pensions and funds, all in one regulator | Securities markets, mutual funds, AIFs, PMS, intermediaries |
| Fund rules | IFSCA (Fund Management) Regulations, 2025 | Separate regulations for mutual funds, AIFs and PMS |
| Currency of products | Foreign currency, usually USD | Indian rupees |
| How residents invest | Under LRS, as an overseas investment | Normal rupee payment |
| Fund manager is called | Fund Management Entity (FME) | Asset management company (AMC) or manager |
Where SEBI still appears in GIFT City
SEBI does not regulate GIFT City funds, but it can still be part of the picture. An inbound GIFT City fund that buys Indian shares and bonds directly usually registers with SEBI as a foreign portfolio investor (FPI), because it is investing in SEBI-regulated Indian markets. In 2024 SEBI also changed its FPI rules so that IFSC-based funds can take money from NRIs, OCIs and resident Indians. So the fund itself answers to IFSCA, while its trades in India follow SEBI's market rules. More on this in FPIs in GIFT City.
What regulation does and does not protect
- It does: require the manager to be registered and fit to run money, set rules on who may invest, require offer documents and regular disclosure, and require independent parties such as custodians and auditors.
- It does not: guarantee returns, protect you from market falls or currency moves, or make a fund suitable for you. That depends on the fund, its strategy and your situation.
Checking a GIFT City fund manager in four steps
- 1
Get the FME's legal name
From the offer document
- 2
Search the IFSCA Directory
ifsca.gov.in, regulated entities
- 3
Match the category
e.g. Registered FME (Retail)
- 4
Confirm the scheme type
Retail, restricted or venture capital
If something goes wrong, raise it first with the Fund Management Entity in writing. If it is not resolved, IFSCA, as the regulator, is the next step for GIFT City funds, in the same way SEBI is for domestic funds. For a fuller profile of the regulator, read What is IFSCA.
How IFSCA came about
- 2015: GIFT IFSC begins operating as India's first International Financial Services Centre, with RBI, SEBI, IRDAI and PFRDA each regulating their own part of it.
- 2019: Parliament passes the International Financial Services Centres Authority Act to bring these powers under one regulator.
- April 2020: IFSCA is established, headquartered in GIFT City.
- 2022 and 2025: IFSCA issues its own fund management regulations, revised in 2025 to cut the minimum fund size from USD 5 million to USD 3 million and the PMS minimum from USD 150,000 to USD 75,000.
The practical effect for investors is one regulator, one set of rules and one directory to check, instead of four. For fund investors, that makes due diligence simpler than it was before 2020.
This article is educational only and is not regulatory or investment advice. Regulatory frameworks evolve — always verify current requirements directly with IFSCA.