IFSCA Proposes Framework for Secondary Listing of ETFs in IFSC

Summary: The International Financial Services Centres Authority (IFSCA) has published a Consultation Paper on Secondary Listing of Exchange Traded Funds in IFSC on August 27, 2026, seeking public comments on a proposed framework under which an ETF already listed in India outside IFSC or in a foreign jurisdiction may obtain a secondary listing on a recognised stock exchange in the IFSC. The proposal is intended to enable a fund manager regulated in India or a foreign jurisdiction to bring an existing ETF to the IFSC without necessarily establishing a Fund Management Entity (FME) in the IFSC.

The consultation paper explains that the IFSCA (Fund Management) Regulations, 2022, which came into effect in May 2022, were reviewed and replaced by the IFSCA (Fund Management) Regulations, 2025 in February 2025. The consultation states that the fund management ecosystem in GIFT-IFSC had 235 FMEs and 416 schemes as on July 31, 2026. It also notes the growth of retail-oriented schemes following greater clarity regarding their taxation during Union Budget FY 2024-25.

Under the existing Regulation 114 of the FM Regulations, an ETF or Investment Trust listed in India outside IFSC or in a foreign jurisdiction and compliant with the law of its home jurisdiction may be allowed to list and trade on a recognised stock exchange in IFSC. The consultation proposes to modify this framework so that a manager regulated in its home jurisdiction can seek secondary listing without obtaining FME registration solely for that purpose.

The proposed framework would introduce specific eligibility requirements for both the manager and the ETF. The manager would have to be either a Registered FME (Retail), or an entity licensed or regulated for fund management for retail investors in India or a foreign jurisdiction and satisfying the fit and proper requirements under Regulation 9(1), along with any other criteria specified by IFSCA or the recognised stock exchange. The proposed ETF would generally need to have index replication as its primary objective, be subject to an appropriate home-jurisdiction regulatory regime and have a listing and trading track record of at least 12 months. The 12-month requirement would be relaxed for an ETF launched by a Registered FME (Retail) or a manager having a “sound track record”. The proposed definition of sound track record includes at least five years of experience managing AUM of at least USD 200 million with more than 25,000 investors and at least five ETFs under management that are listed and traded on an exchange in India, IFSC or a foreign jurisdiction at the time of application.

Where the ETF manager is not registered as an FME, a local representative would be required. The representative would serve as a local point of contact between the manager, investors and IFSCA and would undertake functions including liaison, grievance redressal, acceptance of notices and correspondence from the Authority, provision of information or records, notification of trading suspension or other material information, and other functions specified by IFSCA. The proposal identifies eligible categories of representatives, including certain entities regulated by IFSCA as FMEs, capital market intermediaries under the IFSCA (Capital Market Intermediaries) Regulations, 2025, Banking Units under the IFSCA (Banking) Regulations, 2020, Registered FME (Retail), and specified Registered FME (Non-Retail).

The proposal also requires the manager to ensure at least the same level of investor protection in IFSC as is available to investors in the home jurisdiction. Additional disclosures would have to be made in English on the recognised stock exchange and, where applicable, in marketing material. These would cover the ETF’s place of constitution, home regulator, secondary-listing status, manager details and regulatory registration, representative details, roles and responsibilities, trading and market-making arrangements, fees and charges, applicable tax treatment, additional risks, grievance mechanisms and other relevant information.

The consultation paper draws on international practices in Hong Kong, Singapore and Mexico. It observes that these jurisdictions generally rely on the quality of home-jurisdiction regulation while requiring or recognising local representation, appropriate disclosure, market making and exchange-level trading requirements. The proposed IFSC framework similarly seeks to combine home-market regulation with local investor access and supervisory connectivity.

The consultation also proposes amendments concerning suspension, delisting and voluntary delisting. Regulation 115 would be clarified to cover suspension of Investment Trusts, schemes and ETFs where specified regulatory or exchange conditions are not met, where the product is suspended on another exchange, or where suspension is required for orderly market operation. Regulation 116 would expressly include the manager of a secondary-listed ETF among the parties whose eligibility and actions may be relevant to delisting. Regulation 117 would similarly recognise the manager in the context of voluntary delisting.

For investors, IFSCA states that the framework is expected to make globally recognised ETFs available through a recognised IFSC exchange and provide access to global ETFs through a single trading venue. For recognised stock exchanges, secondary listings are expected to increase trading participants and volumes and broaden the product profile beyond predominantly derivative- and debt-oriented products. For global fund managers, the proposal is intended to provide a calibrated route for bringing existing global products into the IFSC ecosystem, while for the wider fund-management ecosystem it is expected to strengthen the market for ETFs domiciled in IFSC.

Public comments have been invited on the proposed amendments contained in the Annexure. Comments may be submitted in MS Word or MS Excel format by email to the Division of Funds Regulation (Policy & Regulation), Shri Shashwat Gupta, Consultant, with a copy to Shri Aditya Sarda, Deputy General Manager, latest by September 17, 2026. The consultation paper does not itself constitute the final regulatory amendment; the proposed provisions remain subject to the consultation and subsequent regulatory process.

International Financial Services Centres Authority

CONSULTATION PAPER ON
Secondary Listing of Exchange Traded Funds in IFSC

Published on: August 27, 2026

A. Objective

1. The objective of this Consultation Paper is to seek comments from the public on the proposal relating to a framework whereby a fund manager, duly regulated in India or in a foreign jurisdiction, may secondary list its ETF on a recognised stock exchange in the IFSC.

B. Background

1. In its endeavour to design a globally benchmarked regulatory regime providing opportunities to the fund managers to undertake a variety of fund management related activities from GIFT-IFSC, the Authority instituted the IFSCA (Fund Management) Regulations, 2022, which came into effect in May 2022, and were subsequently reviewed and replaced with the IFSCA (Fund Management) Regulations, 2025 (“FM Regulations”) in February 2025.

2. The fund management ecosystem in GIFT IFSC has grown at a healthy pace. As on July 31, 2026, there are 235 FMEs and 416 schemes at IFSC.

3. While the funds ecosystem in IFSC initially commenced with institutionally oriented investment products, the clarity with respect to the taxation of Retail Schemes and ETFs provided during the Union Budget FY 2024-25 has led to the launch of retail-oriented schemes as well. In line with this, the number of investors in Retail Schemes has grown appreciably, rising more than thirteen-fold from 255 as on September 30, 2025, to 3,438 as on March 31, 2026, marking a broadening of the funds landscape in the IFSC beyond institutional investors. This progression further invites attention to the investment products through which the wider investing public participates in the capital markets, wherein the ETF is globally recognised as one of the prominent products.

4. An ETF is an open-ended pooled investment vehicle which holds securities and trades on a stock exchange in the manner of a listed security. Within a single instrument, which is often based on a transparent rule-based index, the investor receives the diversification of the underlying basket and intraday liquidity of an exchange-traded security, at a cost that is amongst the lowest of any managed product. The creation and redemption mechanism operated by the authorised participants keeps the traded price tethered to the value of the underlying portfolio, while the market makers provide continuous two-way quotes on the exchange. This combination of simplicity, transparency and low cost has made the ETF the instrument of choice for households entering the capital markets across the major economies. While ETFs gained pace based on their index-aligned feature, in recent years actively managed ETFs have also become prevalent in some markets.

5. As per the industry estimates¹, the global ETF market has grown to approximately USD 23.11 trillion in assets by July 2026. In addition to the rising AUM, the industry has also witnessed growth in the number of ETF offerings, rising from 14,640 in July 2025 to 17,654 in July 2026. Significantly, for the present purpose, the 17,654 ETFs reported for July 2026 have 34,072 listings on 85 stock exchanges in 66 countries, representing the vastness of the mechanism of secondary listing and its significant share in the overall ETF activity.

C. Secondary Listing of ETF

1. A secondary listing of an ETF admits an existing ETF traded on a stock exchange in its home jurisdiction to trade on a stock exchange in another jurisdiction (host jurisdiction) while the ETF retains, in its home jurisdiction, its primary listing, its manager, its portfolio and its ISIN (International Securities Identification Number). Therefore, a secondary listed ETF does not lead to creation of a new product, and merely adds a trading venue to the existing ETF which is already regulated in its home market.

2. Chapter VII of the FM Regulations already envisages such admission into the IFSC. Regulation 114 permits an ETF that is listed in India (outside IFSC) or in a foreign jurisdiction and is in compliance with the law of its home jurisdiction, to list and trade on a recognised stock exchange in the IFSC. The provision, as presently framed, however, proceeds on the basis that the fund is brought to the IFSC by a FME registered with the Authority.

3. In the course of the Authority’s interactions with the global fund managers, they have expressed interest in secondary listing, in the IFSC, of their ETFs listed in foreign jurisdictions. Such managers, while duly regulated in their home jurisdictions, are not necessarily registered with the Authority as FMEs and the establishment of a FME in the IFSC solely for the purpose of bringing an existing fund to trade may not be proportionate to the activity involved, given that the fund continues to be managed and primarily regulated in its home jurisdiction.

4. The interest so expressed brings into focus the manner in which secondary listing is ordinarily undertaken across jurisdictions. While the presence of the manager of the secondary listed ETF in the host jurisdiction is understood to be the most regulatorily robust approach as it ensures direct regulatory scrutiny of the manager and its offerings in the host jurisdiction, in the prevailing international practice, the manager is not ordinarily required to establish itself in the host jurisdiction. The manager, instead, appoints a representative, a person with local presence and preferably under the regulatory purview of the regulator of the host jurisdiction, while the listing norms of the regulator / stock exchanges govern the trading related conduct.

5. Since the Authority intends to provide a globally benchmarked regulatory framework for fund management activities in the IFSC, the extant requirement of the fund manager being present in the IFSC is being reviewed in light of the practices of some of the foreign jurisdictions. Based on the understanding of the available literature and the prevalent norms, such practices are summarised in the following section.

D. International Practices

1. Hong Kong: The Securities and Futures Commission (“SFC”) authorises the offering and listing of foreign funds under its Code on Unit Trusts and Mutual Funds. The management company of such a fund is required either to be licensed or registered in Hong Kong or to be based in a jurisdiction whose regulator operates an inspection regime acceptable to the SFC, the acceptability, inter alia, resting on whether the overseas authority inspects its investment management firms in a manner generally consistent with the SFC. Further, apart from mandatory market making, SFC also requires a local licensed / registered entity to be appointed as the local representative, which is encouraged to be within the management group of the fund manager.

2. Singapore: The Monetary Authority of Singapore (“MAS”) recognises a collective investment scheme constituted outside Singapore for offer to the retail investors under the Securities and Futures Act. Such recognition primarily relies on equivalence of investor protection norms of the home jurisdiction with that in Singapore. Further, MAS requires appointment of a local representative in Singapore as a prerequisite for such recognition. Furthermore, under the SZSE-SGX ETF Link, MAS has, inter alia, also placed the requirement for the ETF to have a trading history of at least 1 year, meet the prescribed thresholds of size and is managed by a licensed firm having a track record of at least 5 years in managing investments.

3. Mexico: Foreign securities, including ETFs, are permitted admission to the Mexican stock exchanges / platform when the issuer is subject, in its home jurisdiction, to the supervision of an authority or of a self-regulatory entity, under a legal regime that protects the interests of the investors, ensures the order and transparency of the operations, prevents and sanctions the misuse of privileged information and market manipulation, and avoids conflicts of interest. Further, a domestic broker or bank acts as the local representative by sponsoring the admission. The stock exchange reviews the eligibility of the foreign security/ETF and reports to the regulator, CNBV.

4. Read together, while none of these jurisdictions requires the manager to establish itself in the host jurisdiction, the regulatory regimes broadly insist on the quality of the home jurisdiction regulation of the manager, a home listing with a demonstrable track record for the ETF product, a mandatory local representative, timely disclosures and market making for continuous and orderly quotes in the host jurisdiction. Further, as an exchange traded product, the managers of the secondary listed ETFs are also required to comply with the requirements specified by the stock exchanges in the host jurisdictions.

E. Expected Benefits

1. Enabling secondary listing of ETFs in the IFSC on the lines of the international practices is expected to advance several objectives –

a. For the investors, the globally renowned ETFs through which the world holds its equities, bonds and other assets would become available on a recognised stock exchange in the IFSC. This will offer the investors access to the global ETFs at a single trading venue, housed in the fastest-growing major economy, and regulated by a unified regulator.

b. For the recognised stock exchanges, such listings and the trading flow accompanying them would deepen the market in the IFSC by bringing in more trading participants and trading volumes, and shall also be instrumental in changing the product profile available on the IFSC exchanges from the extant predominantly derivative and debt-oriented products, which are more aligned towards institutions, to equity-oriented products, which are equally relevant for the retail investors.

c. For the global fund managers, the framework would offer a calibrated route to bring their global products to the IFSC ecosystem, in a manner which is consistent with the global best practices and addresses the supervisory concerns of the Authority.

d. For the fund management ecosystem of the IFSC, the listings, the market making and the investor familiarity that come with secondary listing would, in time, strengthen the market for the ETFs domiciled in the IFSC. As the preferred gateway for the global flows into and out of India, GIFT IFSC has the unique advantage to host primary listings of –

i. India-bound ETFs for the global investors that seek to obtain exposure to Indian markets through a globally benchmarked regulatory and taxation regime, and

ii. Foreign-bound ETFs for the Indian and regional investors that seek to obtain exposure to the foreign markets through a well-regulated channel.

F. Proposed Framework

1. The Authority proposes to amend Chapter VII of the FM Regulations so as to permit a fund manager regulated in its home jurisdiction to secondary list an ETF on a recognised stock exchange in the IFSC. The proposed amendments, together with the rationale and the relevant global precedents, are placed at Annexure to this Consultation Paper.

2. The proposed framework, at a glance, is presented below:

G. Public Comments

1. Comments and suggestions from the public are invited on the amendments proposed to the FM Regulations, placed at Annexure to this consultation paper.

2. Comments may be sent by email to the Division of Funds Regulation (Policy & Regulation) at [email protected] and Shri Shashwat Gupta, Consultant, at [email protected], with a copy to Shri Aditya Sarda, Deputy General Manager, at [email protected], latest by September 17, 2026.

3. The comments may be provided in the following format (MS Word or MS Excel only):

* such as relevant practices prevalent in other financial centres, practices in other business areas, potential impact of the suggestion, etc.

Notes:

1 ETFGI Press Release dated August 19, 2026