The International Financial Services Centre (IFSC) has issued a circular on 26 November 2025, introducing new disclosure requirements for entities operating within its regulatory framework. These mandates aim to enhance transparency and ensure that investors are fully aware of the risks associated with global market access.
Core Components of the Mandate
Applicability
The new disclosure requirements apply to:
- Global Access Providers (GAPs)
- Introducing Brokers (IBs)
These entities are now required to prominently display specific risk notices and disclaimers to their clients at every login.
Key Risk Disclosures
The disclosures, as outlined in Annexure I, cover a comprehensive range of risks associated with trading in foreign markets. These include:
- Market Risk: Potential losses due to fluctuations in market prices.
- Currency Risk: Exposure to exchange rate volatility.
- Custody Risk: Risks related to the safekeeping of assets.
- Liquidity Risk: Difficulty in buying or selling assets without affecting their price.
- Settlement Risk: The possibility that one party fails to meet its obligations in a transaction.
- Technology and Cyber Risks: Vulnerabilities related to digital platforms and cyber threats.
- Product Suitability Risk: Ensuring that financial products are appropriate for the investor’s profile.
- Legal and Taxation Risks: Compliance with laws and tax obligations in different jurisdictions.
- Remittance Risk: Challenges related to transferring funds across borders.
- Geopolitical Risk: Impact of political events or instability on investments.
Investor Acknowledgment
Investors are required to acknowledge these risks before proceeding with any transactions. This step ensures that they are fully informed and understand the potential implications of their investment decisions.
Purpose and Impact
The primary goal of these mandates is to:
- Enhance transparency in global market transactions.
- Protect investors by ensuring they are aware of all potential risks.
- Promote responsible trading practices within the IFSC framework.
Conclusion
The IFSC’s new disclosure requirements mark a significant step toward creating a safer and more transparent global trading environment. By mandating clear and comprehensive risk disclosures, the IFSC aims to empower investors and reduce the likelihood of unforeseen financial losses.
For any further clarification on any specific section or additional details about these disclosures, please refer IFSC Circular dated 26/11/2024