Following a memorandum of understanding (MoU) with the Reserve Bank of India (RBI) for information-sharing and recognition of central counterparties established in India, Esma is now in discussions with other Indian financial regulators, including the Securities and Exchange Board of India (Sebi) and Ifsca, for similar cooperation arrangements.
According to sources, the agreement with Sebi is close to being finalised and will primarily focus on information-sharing. Meanwhile, discussions on cooperation agreements with Ifsca are in the final stages, and are being held in consultation with the government.
Sources said that an agreement with Ifsca could allow industry participants registered in GIFT City to access jurisdictions under Esma’s regulatory ambit.
“With the agreement, Ifsca and GIFT City will be recognised as a regulator and state, respectively. This would allow entities to market their products in those countries,” said a person familiar with the developments.
Unlike Sebi, which is an ordinary member of the International Organisation of Securities Commissions (IOSCO), Ifsca is an associate member, resulting in differences in how entities regulated by the two authorities are treated internationally.
Being a signatory to IOSCO enables closer alignment with global standards, enhanced information-sharing, and stronger regulatory enforcement.
Experts said that a cooperation agreement with Esma would help Ifsca-regulated fund managers tap a broader European investor base.
Emailed queries sent to Sebi and Ifsca did not elicit any response till the time of going to the press.
“There have been healthy discussions going on for such relief for some time now. It will be a progressive development where the fund houses don’t need to go and register themselves in various countries as long as the product is approved by the GIFT City. Under the passport mechanism, it will be recognised in those jurisdictions which have MoUs with GIFT City. Similarly, their products will also come to India,” said A Balasubramanian, managing director and chief executive officer (MD&CEO), Aditya Birla Sun Life AMC.
As of September 2025, around 194 fund management entities (FMEs) were registered in GIFT City, with more than 310 schemes and investment commitments totalling $26.3 billion. Many of these schemes cater to non-resident Indians (NRIs) and other overseas investors.
“For GIFT City-based alternative investment fund (AIF) managers, this arrangement addresses the critical “cooperation” prerequisite under Article 42 of the AIF Fund Manager Directive, facilitating cross-border marketing to European LPs (limited partners) under National Private Placement Regimes. It effectively mitigates the technical limitations of Ifsca’s associate membership in IOSCO, providing a formal supervisory mechanism required for institutional capital allocation,” said Rohit Jain, managing partner, Singhania & Co.
He added that for private equity (PE) and venture capital (VC) managers, this would translate into a streamlined and compliant route to access European institutional liquidity, positioning GIFT City as a globally integrated gateway for AIFs.
In August last year, Ifsca had issued the Global Access Provider (GAP) framework to facilitate cross-border capital flows and connect India with global financial markets. Under the framework, global access providers can offer access to financial products listed on overseas stock exchanges and enter into referral arrangements for mutual funds and AIFs.
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MoU with IFSCA may provide recognition for fund management entities set up in GIFT City
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Sources say agreement with Sebi will be on information sharing
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Fund managers will be able to market their products in Esma jurisdictions
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PE/VC managers may be able to tap into European institutional investors
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