The International Financial Services Centres Authority (IFSCA), vide notification no. IFSCA/GN/2025/005_, has introduced the International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025 to regulate entities offering technology-driven financial solutions and support services in the IFSC.

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Invoking powers under Section 28(1) read with Section 12(1) of the IFSCA Act, 2019, the Authority has laid down a comprehensive regulatory framework governing eligibility, registration, compliance, fit-and-proper requirements, and permitted services for TechFin and Ancillary Service Providers.

Chapter I: Definitions and Scope

The regulations define key terms like “TechFin Services” (tech-enabled financial services) and “Ancillary Services” (support services like legal, audit, HR, etc.). Only registered entities can operate, and they must not engage in prohibited services listed in the Third Schedule. The chapter also explains terms like “Resident,” “Non-resident,” “Group Entities,” and “Intermediaries.” Applications must be submitted via the Single Window IT Systems (SWIT) portal, and in case terms are undefined, references will be drawn from other laws like the Companies Act and FEMA.

Chapter II: Registration Process

Entities must obtain a registration certificate before starting operations. Those operating under earlier circulars (Feb 2021, Apr 2022) have up to 12 months to register under the new framework, extendable to 24 months with approval. Eligible applicants include companies, LLPs, and recognised partnerships, excluding those from FATF high-risk jurisdictions. Applications must be submitted online along with necessary documents and fees. Post review and fulfilment of conditions, registration is granted and stays valid unless suspended or surrendered. Any major changes must be reported to the Authority.

Chapter III: Fit and Proper Requirements and Code of Conduct

Key personnel like directors, partners, compliance and principal officers must meet ‘fit and proper’ criteria integrity, reputation, financial soundness, and clean regulatory record. Disqualifications include criminal or regulatory issues. The Code of Conduct (Fourth Schedule) mandates fair practices, regulatory compliance, and adequate staffing within IFSCs.

Chapter IV: Appointment of Officers

Every registered provider must appoint a full-time principal officer and a compliance officer based in the IFSC. Entities serving only their group companies may seek exemption from the principal officer requirement.

Chapter V: Intermediaries and Service Recipients

Service providers are allowed to offer their services to non-resident intermediaries and service recipients, provided they are from jurisdictions not flagged by the Financial Action Task Force (FATF) as high risk. Services can also be extended to Indian residents, but only for the limited purpose of setting up offices in IFSCs or abroad.

Chapter VI: Miscellaneous Provisions

Entities must maintain records in specified foreign currencies (INR allowed for admin costs), file regular reports, and cooperate with inspections. The Authority may relax rules for market development, issue directions, and clarify norms. Earlier circulars will be repealed after 24 months, but rights and obligations under them will remain valid during the transition.

First Schedule: Permitted Ancillary Services

This schedule lists the types of ancillary services allowed under the regulations. It includes a broad range of professional and support services such as actuarial, advisory, auditing, compliance management, legal, valuation, fund administration, HR and payroll, risk management, broking (for leasing), trusteeship (except debenture trustees), and outsourcing services. It also includes newer offerings like family office support, global mobility services, and centres of excellence for training and research, subject to approval by the Authority.

Second Schedule: Permitted TechFin Services

This schedule outlines the types of technology-related services that can be offered. It includes services such as data analytics, cybersecurity, application development, regulatory technology (RegTech), cloud computing, automation, and IT infrastructure management. It also covers emerging tech applications involving AI, blockchain, quantum tech, metaverse, and Web 3.0. Entities may also offer support for digital banking, trade finance, tokenization, and operate development centres for technology research. Additional services may be approved by the Authority.

Third Schedule: Prohibited Services

This schedule lists the types of services that TechFin and Ancillary Service Providers are not allowed to offer. These include core activities not permitted for outsourcing by home regulators, services already regulated by IFSCA, facility management, transport and logistics, construction-related services, and any other services that the Authority believes do not relate to supporting financial services under the Act.

Fourth Schedule: Code of Conduct

Registered entities must follow all IFSCA rules, maintain adequate infrastructure and staff, report changes (especially those linked to FATF jurisdictions), and apply for separate registrations for other regulated activities.