IFSCA Notifies Market Abuse Rules for Securities Markets in GIFT City

The International Financial Services Centres Authority has notified a consolidated market-abuse framework for securities markets in GIFT City, drawing insider trading, fraudulent and manipulative practices and unfair trading into a single set of regulations. 

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The IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026, are designed to protect investors and to lay down a framework prohibiting market abuse within the financial centre. 

What the new rules replace 

The framework takes over from the Securities and Exchange Board of India regimes that previously governed these matters in the IFSC. From the date the new regulations come into force, SEBI's Prohibition of Insider Trading Regulations, 2015, and its Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003, cease to apply in the IFSC. 

Where violations occur, IFSCA can act under its governing Act. Its options include issuing a warning or censure and suspending or cancelling the registration of regulated entities or individuals. The regulator has been more active on enforcement in recent months, with directions that have included penalties and cancellation of registration. 

Prohibited conduct 

The regulations bar fraudulent transactions, manipulation of securities prices and benchmarks, the creation of artificial demand, circular trading and the spreading of false or misleading information. They expressly cover the practice of repeatedly placing and cancelling orders with no intention of executing them, where the aim is to distort supply, demand or prices. 

Also prohibited are the circulation of false or misleading information through physical or digital media, unauthorised transactions on behalf of clients, artificial trading activity and the planting of false or misleading news intended to induce investors to buy or sell securities. 

Insider trading provisions 

Insiders may not pass on material non-public information except for legitimate purposes, in the performance of their duties or in discharging a legal obligation. An insider holding such information may not trade in the securities concerned or cause anyone else to do so. Any trade carried out while in possession of the information will be presumed to have been based on it, subject to the defences specified in the regulations. 

Disclosure and internal controls 

Designated persons, a category that includes controlling shareholders and directors, carry disclosure duties. Trades that exceed a quarterly threshold of $25,000 must be reported within two trading days. Listed entities must then inform the exchanges and publish the disclosures on their own websites within two working days of receiving them. 

Listed entities are further required to put in place effective internal controls and a code of conduct against market abuse. Those controls must address how material non-public information is identified and kept confidential, restrictions on communicating it, identification of the employees who have access to it, and periodic review of the controls themselves.