IFSCA Brings New Market-Abuse Rules Into Force for IFSC Securities; Insider-Trading and Manipulation Framework Recast
The International Financial Services Centres Authority has brought a dedicated market-abuse framework into force for the securities market in India's International Financial Services Centre. The International Financial Services Centres Authority (Prohibition of Market Abuse in Securities Markets) Regulations, 2026, notified as IFSCA/GN/2026/012, were dated August 25, 2026 and published in the Official Gazette on September 1, 2026. The regulations state that they take effect from the date of Gazette publication.
The development is important for listed entities, directors, controlling shareholders, compliance teams, auditors, company secretaries, lawyers, investment advisers and other professionals working with GIFT IFSC securities because IFSCA has moved from relying on the earlier SEBI insider-trading and fraudulent-trade-practice regimes to an IFSC-specific rulebook. The new framework combines restrictions on insider trading with prohibitions on manipulative, fraudulent and unfair practices, while also prescribing internal controls and transaction-disclosure obligations.
What the new IFSCA regulations cover
The stated objective is investor protection through a framework that prohibits market abuse in the IFSC securities market. The regulations define market abuse broadly to include insider trading as well as manipulative, fraudulent and unfair trade practices. They also use a wide concept of a connected person: a person associated with an entity during the six months preceding the relevant act may fall within the definition where the relationship, position or communication gives or is reasonably expected to give access to material non-public information.
The definition of material non-public information, or unpublished price-sensitive information, is extensive. It ordinarily covers matters such as financial results, dividends, changes in capital structure, mergers and acquisitions, delistings, disposals, business expansion, significant orders or contracts outside the normal course of business, changes in key managerial personnel, resignation of a statutory or secretarial auditor, non-ESG rating changes, fund raising, agreements affecting management or control, fraud or default, insolvency events, forensic audits, material regulatory action, litigation and other developments capable of materially affecting the price of securities.
Professionals receiving MNPI can themselves become insiders
The rules restrict communication, procurement and trading based on material non-public information, while recognising that confidential information may need to be shared for legitimate business purposes. The framework contemplates legitimate-purpose sharing with persons such as partners, collaborators, lenders, customers, suppliers, merchant bankers, legal advisers, auditors, insolvency professionals and other advisers or consultants where the sharing is in the ordinary course and satisfies the applicable conditions.
That exception does not make the information unrestricted. A professional who receives such information may itself be treated as an insider and should therefore ensure need-to-know access, confidentiality controls, restricted-list or trading-window processes where relevant, and a defensible record of why the information was shared.
Trading while in possession is prohibited, with defined exceptions
An insider is generally prohibited from trading in listed securities while in possession of material non-public information. The regulations provide specified circumstances in which a trade may still be defensible, including certain inter-se transfers, statutory or regulatory obligations, exercise of stock options and situations supported by effective information barriers. The framework also provides for trading plans, with the regulations referring to disclosure of a trading plan at least 120 days before trades under the plan commence.
USD 25,000 quarterly transaction threshold for designated persons
One of the clearest operational obligations is the transaction-disclosure threshold for designated persons. Where the value of securities traded exceeds USD 25,000 in a calendar quarter, the designated person must make the prescribed disclosure within two trading days. The listed entity must then notify the recognised stock exchange or exchanges and host the information on its website within two working days, as applicable under the regulations.
For compliance and finance teams, this means designated-person registers, trade-monitoring logic and escalation workflows should be checked against the new IFSC threshold rather than simply carrying forward processes built for the earlier domestic SEBI framework.
Manipulation and unfair practices are addressed directly
The regulations separately prohibit a range of manipulative, fraudulent and unfair activities. The covered conduct includes creating a false or misleading appearance of trading, circular transactions, dissemination of misleading information, misuse of client funds, mis-selling, placing and repeatedly cancelling orders without genuine intent, manipulation of books or financial statements, and unlawful mobilisation of funds, among other specified practices.
For audit and assurance professionals, the inclusion of financial-statement manipulation and forensic-audit related information within the framework increases the need to coordinate securities-law implications with financial reporting, fraud-response and governance processes. A matter that begins as an accounting or audit issue may also create market-abuse controls if it is price-sensitive and not generally available.
Listed entities need institutional controls and a code of conduct
The rules require listed entities to establish institutional mechanisms to prevent market abuse, including internal controls and a code of conduct. This is not only a trading-compliance exercise. Boards and senior management should ensure that responsibility for identifying MNPI, controlling access, maintaining records, monitoring designated-person trades and handling disclosures is clearly assigned.
Internal audit teams should test whether sensitive information is identified promptly, whether access logs and confidentiality arrangements are maintained, whether disclosures cross the USD 25,000 threshold are captured on time, and whether exceptions or trading-plan cases are supported by documentation.
What changes from the earlier regime
On commencement, the regulations provide that the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 cease to apply in the IFSC, subject to savings for actions already taken. IFSCA also retains enforcement powers that include warning or censure and suspension or cancellation of registration in appropriate cases.
What CA, finance and compliance teams should do now
- Map the new IFSCA definitions of insider, connected person and material non-public information to the entity's existing policies.
- Review designated-person lists and trade-monitoring systems for the USD 25,000 calendar-quarter threshold and two-trading-day disclosure requirement.
- Revisit information-sharing arrangements with auditors, lenders, advisers, insolvency professionals and other external parties that may receive MNPI for legitimate purposes.
- Update codes of conduct, internal controls, escalation matrices and training material for IFSC operations rather than relying solely on legacy SEBI templates.
- Document transition decisions and preserve records for actions taken under the earlier regime.
Practical takeaway: the September 1 commencement is a genuine regime change for securities-market compliance inside the IFSC. Entities and advisers should treat the new IFSCA regulations as the controlling framework for current IFSC market-abuse obligations and use the official Gazette text for final legal interpretation.
Official Gazette document
IFSCA consultation and regulatory background
Official source: View the official source document
Key takeaway
IFSCA's new Prohibition of Market Abuse in Securities Markets Regulations, 2026 are now in force in India's IFSC, replacing the earlier SEBI insider-trading and PFUTP frameworks there and introducing IFSC-specific disclosure, control and enforcement rules.
