From borrowed rules to a bespoke rulebook: Can IFSCA create an international market conduct regime?

The International Financial Services Centres Authority (IFSCA) notified the IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026(PMASM Regulations) on 25 August 2026. The PMASM Regulations are an addition to the growing GIFT-IFSC's securities market, a self-contained, unified code addressing insider trading and fraudulent, manipulative and unfair trade practices, in place of the extended application of two separate SEBI regulations.

From inherited framework to independent rulebook

Until commencement of the PMASM Regulations, market-conduct matters in IFSC securities markets were governed by the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 which has been extended to the GIFT-IFSC under the supervision and monitoring of IFSCA.

What the 2026 framework actually changes

The PMASM Regulations is divided into four chapters:


1. Definitions: The terminology, "Material non-public information" is defined and, in the same clause, equated with "unpublished price sensitive information", preserving the SEBI-derived UPSI concept while adopting the internationally. This definition is structurally aligned with that of UPSI under the PIT Regulations, with one key difference – coverage is extended from only companies under the PIT Regulations to entities under the PMASM Regulations.

2. Insider-trading restrictions: Regulation 4 prohibits communicating or procuring MNPI outside "legitimate purposes”. Regulation 5 prohibits trading while in possession of MNPI, presumes such a trade was made on that basis, and lists circumstances that rebut the presumption: off-market inter-se transfers between informed insiders, block deals, statutorily mandated trades, pre-determined ESOP exercises, institutional Chinese-wall arrangements, and trades under a trading plan disclosed at least 120 days in advance.

3. Fraudulent, manipulative and unfair trade practices: Chapter III lists prohibited conduct, false or misleading trading appearances, circular transactions, price manipulation (including of reference or benchmark prices), planting false news, repeated order cancellation without intent to execute, manipulation of books and accounts, and "mis-selling," among others, under a general prohibition on fraudulent and deceptive dealing.

4. Institutional obligations and enforcement: Listed entities must maintain internal controls and a code of conduct addressing MNPI identification, communication restrictions, and periodic review. Contravention is dealt with under the corresponding provisions of the IFSCA Act; sanctions under the Regulations themselves are warnings, censure, and suspension or cancellation of registration.

How the new framework is maintaining the international standards

Structurally, IFSCA's move to a single, unified code brings it closer to the EU and UK model, to treat insider dealing, unlawful communication and market manipulation as three limbs of one concept of market abuse within one instrument a single unified code, than to the pre-2026 Indian model of two separate regulations.

The sharpest structural divergence is enforcement forum. Hong Kong runs parallel civil and criminal tracks, with civil misconduct determined by a dedicated Market Misconduct Tribunal and criminal conduct prosecuted before the courts. The UK similarly sits a civil regime (enforced administratively by the FCA) alongside a separate criminal offence under the Criminal Justice Act 1993. IFSCA creates no equivalent dual track or specialist tribunal; enforcement runs through its own administrative powers under the IFSCA Act, principally warnings, censure and registration action.

Neither the consultation paper nor the final notification asserts that any specific provision is modelled on a specific foreign one. Similarity in structure and vocabulary is evident; formal equivalence has not been claimed and should not be inferred.

Rules versus regulatory capacity

IFSCA is an associate member of IOSCO, has signed the IOSCO Multilateral MOU (2022) and Enhanced MMOU (2024), and maintains bilateral MOUs with arrangements that, in principle, support cross-border information exchange relevant to market-abuse investigations.

On demonstrated effectiveness specifically for market abuse, the evidence is thinner. IFSCA's published enforcement-actions record for 2024–2026 shows a steady stream of orders, warnings, penalties, cancellations or suspensions of registration, against intermediaries for various contraventions.

Publicly available official material reviewed for this article does not establish that IFSCA has yet brought a market-abuse enforcement action under the new framework, nor does it disclose specific surveillance technology deployed for this purpose. That is unsurprising given the Regulations' recency, but it means the existence of investigative and sanctioning powers should not yet be read as proven effectiveness in this specific domain.

What changes for market participants?

For issuers, the Regulations codify a governance expectation, internal controls, an MNPI-handling policy, designated-person identification, that did not previously exist as an IFSC-specific instrument.

For exchanges, the Regulations impose no EU-style STOR architecture;3 their obligations sit within IFSCA's broader market-integrity mandate rather than this instrument specifically.

For intermediaries, the disclosure timelines (two trading days for designated-person transactions; two working days for onward exchange disclosure) and the regulation 9 institutional-controls requirement are concrete, near-term compliance obligations.

For institutional investors and asset managers, the regulation 5(3) defences, the Chinese-wall carve-out for non-individual insiders and the 120-day trading-plan disclosure, give a narrow, specified route to trade while holding MNPI, one that investors running both India-linked and IFSC-linked mandates will need to build into compliance systems distinct from their SEBI-regime processes.

Can this support GIFT's international-market ambition?

The central proposition that a financial centre cannot become genuinely international until its market-conduct framework is internationally credible, is reasonable, but the PMASM Regulations test only one half of it.

Technically, IFSCA has replaced a borrowed framework with an authored one, adopted internationally recognisable terminology and structure, moved toward the unified-instrument models, and embedded itself in the IOSCO information-sharing network.

On the other half demonstrated surveillance capability, enforcement records specific to market abuse, and a resolved SEBI–IFSCA interface for cross-market conduct, the public record is either thin or silent. Rules are, on the evidence reviewed, a necessary but not sufficient condition for the market-conduct credibility international investors, exchanges and custodians actually rely on. Whether IFSCA converts this rulebook into demonstrated supervisory effectiveness is a question the coming years of enforcement practice, not the notification itself, will answer.

(The authors are Partners at JSA Advocates & Solicitors)