Summary: The International Financial Services Centres Authority (IFSCA) has notified the International Financial Services Centres Authority (Prohibition of Market Abuse in Securities Markets) Regulations, 2026 through Notification No. IFSCA/GN/2026/012 dated August 25, 2026. The Regulations establish a unified framework for preventing and addressing market abuse in securities markets in the International Financial Services Centre, covering insider trading as well as manipulative, fraudulent and unfair trade practices. The framework follows the Authority’s earlier approval of the Regulations at its 29th meeting, where IFSCA stated that the new regime would provide a unified framework covering insider trading and fraudulent, manipulative and unfair trade practices.
The Regulations define key concepts including “connected person”, “insider”, “material non-public information”, “market abuse”, “dealing in securities” and “mule account”. They prohibit communication or procurement of material non-public information except for legitimate purposes, performance of duties or discharge of legal obligations, and prohibit trading while in possession of such information, subject to specified circumstances. Designated persons are required to make specified disclosures, while listed entities must maintain appropriate internal controls and codes of conduct.
The Regulations also prohibit fraudulent, manipulative and unfair dealings, including false trading appearances, artificial price manipulation, circular transactions, misleading dissemination, mis-selling, repeated order cancellation without execution intent, manipulation of books and financial statements, and illegal mobilisation of funds. On commencement, the existing SEBI insider-trading and fraudulent-and-unfair-trade-practice regulations cease to apply in the IFSC, subject to the savings provision contained in the Regulations.
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
NOTIFICATION
Gandhinagar, the 25th August, 2026
International Financial Services Centres Authority (Prohibition of Market Abuse in Securities Markets) Regulations, 2026.
IFSCA/GN/2026/012.— In exercise of the powers conferred by section 12 and section 13 read with sub-section (1) of section 28 of the International Financial Services Centres Authority Act, 2019 (50 of 2019), read with clauses I and (g) of sub-section (2) of section 11, and clauses (a) to I of section 12A of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the International Financial Services Centres Authority hereby makes the following Regulations, namely:-
CHAPTER I
PRELIMINARY
1. Short title and commencement.
1. These Regulations may be called the International Financial Services Centres Authority (Prohibition of Market Abuse in Securities Markets) Regulations, 2026.
2. They shall come into force on the date of their publication in the Official Gazette.
2. Objective.
These Regulations specify the framework for prohibiting market abuse in the securities market in the International Financial Services Centre, in order to protect the interests of investors.
3. Definitions.
(1) In these Regulations, unless the context otherwise requires,–
(a) “Act” means the International Financial Services Centres Authority Act, 2019 (50 of 2019);
(b) “Authority” means the International Financial Services Centres Authority established under sub-section (1) of section 4 of the Act;
(c) “connected person” means a person who is or has been, during the six months prior to the concerned act, associated with an entity, directly or indirectly, in any capacity, including by reason of,–
i. frequent communication with its officers;
ii. any contractual, fiduciary or employment relationship;
iii. being a director, officer or an employee ; or
iv. holding any position, including a professional or business relationship, whether temporary or permanent, that allows or is reasonably expected to allow such person, directly or indirectly, access to material non-public information;
(d) “dealing in securities” includes,–
i. an act of buying, selling or subscribing pursuant to any issue of any securities or agreeing to buy, sell or subscribe to any issue of any securities or otherwise transacting in any way in any securities by any person, including as principal, agent, or intermediary, either by themselves or through mule accounts;
ii. acts which may be knowingly designed to influence the decision of investors in securities; and
iii. an act of providing assistance to carry out the aforementioned acts;
(e) “designated person” means the controlling shareholders and directors of a listed entity, and includes such other persons who may be categorised as such by the listed entity;
(f) “fraud” means any act, expression, omission or concealment committed, whether in a deceitful manner or not, by a person, by any other person with his connivance, or by his agent while dealing in securities, in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance of any loss, and includes,–
i. a knowing misrepresentation of the truth or concealment of material fact in order that another person may act to his detriment;
ii. a suggestion, as a fact, of that which is not true, which such person does not believe it to be true;
iii. an active concealment of a fact by such person having knowledge or belief of the fact;
iv. a promise made without any intention of performing it;
v. a representation made in a reckless and careless manner whether it be true or false;
vi. any act or omission specifically declared to be fraudulent by any other law;
vii. deceptive behaviour by such person depriving another of informed consent or full participation;
viii. a false statement made without reasonable ground for believing it to be true;
ix. the act of an issuer of securities giving out misinformation that affects the market price of the securities, resulting in investors being misled even though they did not rely on the statement itself or anything derived from it other than the market price, and “fraudulent” shall be construed accordingly.
Explanation.–For the removal of doubts, it is clarified that the scope of this clause shall not extend to any general comment made in good faith regarding:–
i. the economic policy of a government;
ii. the economic situation of a country;
iii. trends in the securities markets; or
(iv) any other matter of a like nature, irrespective of whether such comments are made in public or in private;
g. “immediate relative” means spouse of a person and includes parent, sibling, and child of such person or of the spouse, any of whom is either dependent financially on such person, or consults such person in taking decisions relating to trading in securities;
h. “insider” means any person who is,–
i. a connected person; or
(ii) in possession of, or having access to, material non-public information;
(i) “International Financial Services Centre” shall have the same meaning as assigned to it under clause (g) of sub-section (1) of section 3 of the Act;
j. “listed” means listed on a recognised stock exchange in the International Financial Services Centre;
k. “market abuse” means unlawful behaviour in the securities market, and shall include, but not be restricted to, insider trading and manipulative, fraudulent and unfair trade practice;
l. “material non-public information” or “unpublished price sensitive information” means any information, relating to an entity or its securities, directly or indirectly, which is not generally available and which upon becoming generally available to the public on a non-discriminatory basis, is likely to materially impact the price of the securities of the entity, and shall ordinarily include, but not be restricted to, information relating to the following,–
i. financial results;
ii. dividends;
iii. change in capital structure;
iv. mergers, de-mergers, acquisitions, delistings, disposals and expansion of business, award or termination of orders or contracts not in the normal course of business and such other transactions;
v. changes in key managerial personnel, other than due to superannuation or end of term, and resignation of a statutory auditor or secretarial auditor;
vi. change in rating(s), other than ‘Environmental, Social and Governance (ESG)’ rating(s);
vii. fund raising proposed to be undertaken;
viii. agreements, by whatever name called, which may impact the management or control of the entity;
ix. fraud or default by such entity, its promoter, director, key managerial personnel or subsidiary, or arrest of key managerial personnel, promoter or director of the entity, whether occurred within India or abroad.
Explanation 1.– For the purposes of this sub-clause, “default” shall mean non-payment of debt when it has become due and payable.
Explanation 2.– Default by a promoter, director, key managerial personnel or subsidiary may be considered, if it impacts the entity.
Explanation 3.– Default in case of revolving credit facilities, by the entity, may be considered if the outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for more than thirty days;
x. resolution plan/ restructuring or one-time settlement in relation to loans/borrowings from banks/financial institutions;
xi. admission of winding-up petition filed by any party/ creditors and admission of application by the Tribunal filed by the corporate applicant or financial creditors for initiation of corporate insolvency resolution process against the entity as a corporate debtor, approval of resolution plan or rejection thereof under the Insolvency and Bankruptcy Code, 2016, or any similar proceedings under the laws of any foreign jurisdiction;
xii. initiation of forensic audit, by whatever name called, by the entity or any other entity for detecting mis-statement in financials, misappropriation or siphoning or diversion of funds and receipt of final forensic audit report;
xiii. action(s) initiated or orders passed within India or abroad, by any regulatory, statutory, enforcement authority or judicial body against the entity or its directors, key managerial personnel, promoter or subsidiary, in relation to the entity;
xiv. outcome of any litigation(s) or dispute(s) which may have an impact on the entity;
xv. giving of guarantees or indemnity or becoming a surety, by whatever name called, for any third party, by the entity not in the normal course of business; or
xvi. grant, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals;
m. “mule account” includes a trading account maintained with a broker dealer or a dematerialised account or bank account linked with such trading account in the name(s) of a person, where the account is effectively controlled by another person, whether or not the consideration for transactions in such account is paid by such other person;
n. “recognised stock exchange” shall have the same meaning as assigned to it under clause (q) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021;
o. “securities” shall have the meaning assigned to it under clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
p. “trading” includes subscribing, redeeming, switching, buying, selling, dealing, or agreeing to subscribe, redeem, switch, buy, sell, deal in any securities, and “trade” shall be construed accordingly.
(2) Words and expressions used and not defined in these Regulations but defined in the Act, the Companies Act, 2013 (18 of 2013), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Depositories Act, 1996 (22 of 1996), or any rules or regulations made thereunder shall have the same meanings as respectively assigned to them in those Acts, rules or regulations made thereunder or any statutory modification or re-enactment thereto, as the case may be.
CHAPTER II
RESTRICTIONS ON COMMUNICATION AND TRADING BY INSIDERS
4. Communication or procurement of material non-public information.
1. No insider shall communicate, provide or allow access to any material non-public information relating to an entity or securities listed or proposed to be listed to any person, including other insiders, except where such communication is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.
Explanation.– For the purposes of this regulation, the expression “legitimate purposes” includes sharing of material non-public information in the ordinary course of business by an insider with partners, collaborators, lenders, customers, suppliers, lead managers, underwriters, legal advisors, auditors, insolvency professionals or other advisors or consultants, so long as such sharing is not undertaken to evade or circumvent the prohibitions under these Regulations.
2. No person shall procure from, or cause the communication by, any insider of material non-public information, relating to an entity or securities listed or proposed to be listed, except in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.
3. A person in receipt of material non-public information pursuant to legitimate purposes shall be considered an “insider” for the purposes of these Regulations and such person shall handle such material non-public information in compliance with these Regulations.
5. Trading when in possession of material non-public information.
1. No insider shall trade or cause any other person to trade in securities that are listed or proposed to be listed, when in possession of material non-public information.
2. Where a person has traded in securities while being in possession of material non-public information, it shall be presumed that such trade(s) were executed on the basis of such information possessed by him.
(3) Where a person has traded in securities while in possession of material non-public information, he may explain his trading by demonstrating the circumstances, including the following,–
(a) the transaction is an off-market inter-se transfer between insiders who were in possession of the same material non-public information without being in breach of regulation 4, and both parties had made a conscious and informed trade decision;
(b) the transaction was carried out through the block deal window mechanism of a recognised stock exchange, between persons who were in possession of the material non-public information without being in breach of regulation 4 and both parties had made a conscious and informed trade decision;
(c) the transaction was bona fide and carried out pursuant to a statutory or regulatory obligation;
(d) the transaction was undertaken pursuant to the exercise of stock options in respect of which the exercise price was pre-determined in compliance with the applicable laws;
(e) in the case of non-individual insiders,–
i. the individuals who were in possession of such material non-public information were different from the individuals taking trading decisions and such decision-making individuals were not in possession of such material non-public information when they took the decision to trade; and
ii. appropriate and adequate arrangements were in place to ensure that these Regulations are not violated and no material non-public information was communicated by the individuals possessing the information to the individuals taking trading decisions and there is no evidence of such arrangements having been breached;
(f) trades were pursuant to an irrevocable trading plan already disclosed to the recognised stock exchange(s) at least one hundred and twenty days in advance.
(4) The Authority may specify such additional standards and requirements, including reporting requirements, from time to time, as it may deem necessary for the purpose of these Regulations.
6. Disclosure by designated persons.
1. Every listed entity shall have a policy for disclosures by designated persons in accordance with the requirements specified in this regulation.
2. Every designated person shall disclose to the listed entity the number of specified securities acquired or disposed of by him or his immediate relatives, within two trading days of such transaction, if the value of the specified securities traded, whether in one transaction or in a series of transactions, over any calendar quarter, aggregates to a traded value in excess of USD twenty-five thousand or such other value as may be specified by the Authority.
Explanation 1.– For the purposes of this sub-regulation, the term “specified securities” shall include equity instruments, debt securities, and any other derivative instruments of the listed entity.
Explanation 2.– The term “equity instruments” means equity shares, convertible debentures, preference shares and share warrants issued by the listed entity.
3. The listed entity shall, within two working days of receipt of the disclosure under sub-regulation (2), notify such information to the recognised stock exchange(s) where its securities are listed, and also host such disclosure on its website.
CHAPTER III/strong>
PROHIBITION OF MANIPULATIVE, FRAUDULENT AND UNFAIR TRADE PRACTICES
7. Prohibition of certain dealings in securities.
No person shall directly or indirectly,–
a. buy, sell or otherwise deal in securities in a fraudulent manner;
b. use or employ, any manipulative or deceptive device or contrivance in contravention of the provisions of the Act, the Securities and Exchange Board of India Act, 1992 (15 of 1992), or the rules or regulations issued thereunder, in relation to trading of securities listed or proposed to be listed;
c. employ any device, scheme or artifice to defraud in connection with dealing in or issue of securities which are listed or proposed to be listed; or
d. engage in any act, practice, or course of business which operates or would operate as fraud or deceit upon any person in connection with any dealing in or issue of securities which are listed or proposed to be listed in contravention of the provisions of the Act, the Securities and Exchange Board of India Act, 1992 (15 of 1992), or the rules or regulations issued thereunder.
8. Prohibition of manipulative, fraudulent and unfair trade practices.
(1) Without prejudice to regulation 7, no person shall indulge in a manipulative, fraudulent or unfair trade practice in the securities market.
(2) Dealing in securities shall be deemed to be manipulative, fraudulent or unfair trade practice if it involves any of the following,–
a. knowingly indulging in an act which creates false or misleading appearance of trading in the securities market;
b. dealing in securities not intended to effect transfer of beneficial ownership but intended to operate only as a device to inflate, depress or cause fluctuations in the price of such securities for wrongful gain or avoidance of loss;
c. inducing any person to subscribe to an issue of securities for fraudulently securing the minimum subscription to such issue of securities, by advancing or agreeing to advance any money to any other person or through any other means;
d. inducing any person for dealing in securities for artificially inflating, depressing, maintaining or causing fluctuation in the price of securities through any means including by paying, offering or agreeing to pay or offer any money or money’s worth, directly or indirectly, to any person;
e. any act or omission amounting to manipulation of the price of securities including influencing or manipulating the reference price or benchmark price of securities;
f. knowingly publishing or causing to publish or reporting or causing to report by a person dealing in securities any information relating to securities, including financial results, financial statements, mergers and acquisitions, regulatory approvals, which is not true, or which he does not believe to be true prior to or in the course of dealing in securities;
g. entering into a transaction in securities without intention of performing it or without intention of change of ownership of such security;
h. selling, dealing in or pledging of stolen, counterfeit or fraudulently issued securities whether in physical or dematerialised form:
Provided that such selling, dealing in or pledging of stolen, counterfeit or fraudulently issued securities shall not be considered as a manipulative, fraudulent, or unfair trade practice if,–
i. the person selling, dealing in or pledging stolen, counterfeit or fraudulently issued securities was a holder in due course; or
(ii) the stolen, counterfeit or fraudulently issued securities were previously traded on the market through a bona fide transaction;
(i) disseminating information or advice through any media, whether physical or digital, which the disseminator knows to be false or misleading and which is designed to, or likely to, influence the decision of investors dealing in securities;
j. a market participant entering into transactions on behalf of a client without the knowledge of or instructions from the client or misutilising or diverting the funds or securities of the client held in fiduciary capacity;
k. indulging in circular transactions in respect of any securities to artificially provide a false appearance of trading in such securities or to inflate, depress or cause fluctuations in the price of such securities;
l. fraudulent inducement of any person by a market participant to deal in securities with the objective of enhancing his brokerage or commission or income;
m. predating or otherwise falsifying records, including contract notes, client instructions, balance of securities statement, or client account statements relating to any activity in the securities market;
(n) any order in securities placed by a person, while directly or indirectly in possession of information that is not publicly available, regarding a substantial impending transaction in that securities, its underlying securities or its derivative;
(o) knowingly planting false or misleading news which may induce sale or purchase of securities;
(p) mis-selling of securities or services relating to securities market;
Explanation.– For the purposes of this clause, “mis-selling” means sale of securities or services relating to securities market by any person, directly or indirectly, by:–
i. knowingly making a false or misleading statement;
ii. knowingly concealing or omitting material facts;
iii. knowingly concealing the associated risk; or
iv. not taking reasonable care to ensure suitability of the securities or service to the buyer.
(q) creating artificial demand or price of securities;
(r) buying and selling securities at the same price in order to artificially increase trading activity;
(s) dissemination of a rumour or creation of misleading activity which could push the price of securities upward or downward;
(t) submission of order and cancelling it repeatedly with no intent to execute the order, only to alter the supply or demand to artificially establish demand and price of securities;
(u) any diversion, misutilisation or siphoning off of the assets or earnings of an entity that would directly or indirectly manipulate the price of its securities;
(v) manipulation of the books of accounts or financial statements of the entity that would directly or indirectly manipulate the price of its securities; or
(w) illegal mobilisation of funds by sponsoring or causing to be sponsored or carrying on or causing to be carried on any collective investment scheme by any person;
Explanation.– For the removal of doubts, it is clarified that the acts and omissions listed in this sub-regulation are not exhaustive, and an act or omission is prohibited if it falls within the purview of regulation 7, notwithstanding the fact that it is not included in this sub-regulation or has been described as being committed or omitted only by a certain category of person(s) in this sub-regulation.
CHAPTER IV
MISCELLANEOUS
9. Institutional mechanism for prevention of market abuse.
(1) Every listed entity shall put in place an adequate and effective system of internal controls and a code of conduct to ensure compliance with these Regulations to prevent market abuse.
(2) The internal controls shall, inter-alia, provide for the following,–
a. identification and maintenance of confidentiality of material non-public information;
b. placing adequate restrictions on procurement and communication of material non-public information;
c. identification of employees who have access to material non-public information; and
d. periodic review of controls to evaluate their effectiveness.
(3) Without prejudice to sub-regulations (1) and (2), the Authority may specify such additional standards for internal controls and code of conduct as it may deem fit.
10. Sanction for violations.
Any contravention of these Regulations shall be dealt with by the Authority in accordance with the corresponding provisions of the Act.
11. Suspension or cancellation of registration.
The Authority may, without prejudice to any action under the corresponding provisions of the Act or the regulations made thereunder, by an order for reasons to be recorded in writing and in the interests of investors and securities market, take any of the following actions against a person regulated by the Authority, for contravention of the provisions of these Regulations,–
a. issue a warning or censure; or
b. suspend or cancel the registration of such person.
12. Power to remove difficulties.
In order to remove any difficulties in the interpretation or application of the provisions of these
Regulations, the Authority may issue directions or clarifications through subsidiary instructions.
13. Power to specify norms, procedures, and issue clarifications.
For the purposes of implementing these Regulations and the matters incidental thereto, the Authority may specify norms, procedures, processes or any additional requirements by way of subsidiary instructions, and may issue such clarifications as may be required.
15. Power to relax strict enforcement of the Regulations.
1. The Authority may, for reasons to be recorded in writing, in the interest of development of the financial services market in the International Financial Services Centre, relax the strict enforcement of any requirement of these Regulations.
2. For seeking relaxation under sub-regulation (1), an application giving details and the grounds on which such relaxation has been sought, shall be filed with the Authority along with such nonrefundable fee as may be specified by the Authority.
3. The Authority shall process the application filed under sub-regulation (2) within sixty days of the date of receipt of the application, complete in all respects, including responses to clarifications sought and shall record reasons for acceptance or refusal of the relaxation(s) sought by the applicant.
15. Disapplication and savings.
1. On and from the commencement of these Regulations, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, and the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 shall not apply in the International Financial Services Centre.
2. Notwithstanding anything contained in sub-regulation (1), anything done or any action taken or purported to have been taken under the regulations mentioned in sub-regulation (1), prior to the commencement of these Regulations, shall be deemed to have been done or taken under the corresponding provisions of these Regulations.
PRADEEP RAMAKRISHNAN, Executive Director
[ADVT.-III/4/Exty./295/2026-27]
