IFSCA notifies market abuse rules for securities markets in Gift City
Mumbai, Sep 8, 2026
The new framework covers insider trading, fraudulent and manipulative practices, false information and artificial trading, replacing Sebi's existing market-abuse regimes in the IFSC
The International Financial Services Centres Authority (IFSCA) has notified a new market-abuse framework for securities markets in GIFT City, bringing together provisions dealing with insider trading, fraudulent and manipulative practices and unfair trading under a single set of regulations.
The IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026 are aimed at protecting investors and establishing a framework to prohibit market abuse in the financial centre.
The IFSCA framework effectively replaces the Securities and Exchange Board of India’s (Sebi’s) existing insider trading and fraudulent and unfair trade practices regimes for the IFSC.
From the commencement of the new regulations, Sebi’s Prohibition of Insider Trading Regulations, 2015, and Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003, will no longer apply in the IFSC.
For violations, IFSCA can take action under the governing Act, including issuing a warning or censure and suspending or cancelling the registration of regulated entities or persons.
In recent months, the GIFT City regulator has stepped up enforcement actions against alleged violations, with directions including penalties and cancellation of registration.
The rules prohibit fraudulent transactions, manipulation of securities prices and benchmarks, creation of artificial demand, circular trading and dissemination of false or misleading information. They also specifically cover repeatedly placing and cancelling orders without an intention to execute them, where the objective is to artificially alter supply, demand or prices.
The regulations also bar the dissemination 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 that could induce investors to buy or sell securities.
On insider trading, the framework prohibits insiders from communicating material non-public information except for legitimate purposes, performance of duties or discharge of legal obligations.
An insider in possession of such information is also prohibited from trading or causing another person to trade in the concerned securities. Trades carried out while in possession of such information will be presumed to have been based on that information, subject to specified defences.
Designated persons, including controlling shareholders and directors, will also have disclosure obligations. They must report trades exceeding a specified quarterly threshold of $25,000 within two trading days, while listed entities must notify the exchanges and host the disclosures on their websites within two working days of receiving them.
The rules additionally require listed entities to establish effective internal controls and a code of conduct to prevent market abuse. These controls must cover identification and confidentiality of material non-public information, restrictions on its communication, identification of employees with access to such information and periodic reviews of the controls.
[The Business Standard]
