The third regulator that sometimes enters the conversation is the International Financial Services Centres Authority, or IFSCA.

IFSCA regulates financial institutions operating in GIFT City, India’s International Financial Services Centre located in Gujarat.

To understand why this regulator exists, it helps to step back for a moment.

For a long time, most international financial activity involving Indian investors happened outside India. If a fund wanted to invest globally or a financial institution wanted to operate in foreign currency markets, it often had to set up structures in places like Singapore, Dubai, or Mauritius.

GIFT City was created to bring some of that activity back within India’s jurisdiction, but under a regulatory environment designed for international markets.

Because these activities are different from regular domestic financial services, the government created a separate regulator: IFSCA.

IFSCA oversees financial institutions operating inside the GIFT City ecosystem. This includes:

1/ Global asset management companies and investment funds
2/ International brokerage platforms operating from the IFSC
3/ Banks offering foreign currency accounts and services
4/ Exchanges that allow trading in international securities and derivatives

One of the important developments here has been the emergence of GIFT City–domiciled global funds.

Unlike regular Indian mutual funds, which often invest through a feeder structure, many GIFT City funds are structured as single-layer funds that directly hold global securities.

These funds are typically denominated in US dollars and regulated by IFSCA rather than SEBI.

For an investor, this creates another route to access global markets. Instead of sending money abroad directly or investing through an Indian feeder fund, one can invest in a fund that operates from within India’s international financial centre but participates in global markets.

It is important to understand, however, that IFSCA’s jurisdiction is limited to entities operating within GIFT City.

If an Indian investor sends money abroad under LRS and buys a stock listed on the NASDAQ, that investment is not regulated by IFSCA. It falls under the jurisdiction of the regulators governing the US markets.

So IFSCA occupies a specific position within the regulatory structure.

• RBI governs capital leaving India
• SEBI regulates domestic securities markets and investment products
• IFSCA supervises international financial activity taking place within GIFT City’s ecosystem

Together, these institutions form the Indian side of the regulatory framework for global investing.