IFSCA Credit Rating Agency Registration in GIFT City

Introduction & Regulatory Framework

GIFT City IFSC has positioned itself as India’s global financial gateway, enabling international debt issuances, cross-border fund raising, and sophisticated capital market transactions. A critical element underpinning transparency, investor confidence, and market discipline in this ecosystem is the presence of regulated and credible Credit Rating Agencies (CRAs).

To ensure globally aligned standards, the International Financial Services Centres Authority (IFSCA) has notified the IFSCA (Capital Market Intermediaries) Regulations, 2025, supported by the Master Circular for Credit Rating Agencies in IFSC, issued on August 05, 2025. This Master Circular consolidates all regulatory requirements applicable to CRAs operating in IFSC and supersedes the earlier framework issued in October 2024.

IFSCA Credit Rating Agency Registration in GIFT City establishes a comprehensive regime covering registration, permissible activities, governance, rating methodologies, disclosure standards, conflict management, and cyber resilience. The framework reflects international best practices, including IOSCO principles, while catering to the unique requirements of an international financial centre.

For existing and prospective CRAs, including SEBI-registered agencies seeking IFSC presence, understanding this regulatory framework is essential before commencing or expanding rating activities in GIFT IFSC.

Permissible Activities & Business Scope for Credit Rating Agencies

A Credit Rating Agency registered with IFSCA is permitted to undertake a broad range of activities under the Capital Market Intermediaries Regulations, 2025, making IFSC a strategically attractive jurisdiction for rating and analytical services.

Core Permissible Activities

Registered CRAs may undertake:

• Credit rating of financial products and instruments issued or listed in IFSC or permitted foreign jurisdictions, using global rating scales.
• Private and unsolicited ratings, subject to enhanced disclosures.
• Sovereign ratings, with publicly disclosed methodologies.
• Valuation services under the IFSCA (Fund Management) Regulations, 2025.
• Research and rating assessment services.
• Acting as a Monitoring Agency for debt issuances.

SEBI-Registered CRAs

CRAs already registered with SEBI are permitted to undertake rating activities in IFSC, subject to obtaining registration with IFSCA through the SWIT System. Once registered, such CRAs operate fully under the regulatory supervision of IFSCA for their IFSC activities.

ESG Ratings and Ancillary Services

CRAs intending to provide ESG ratings or data products must obtain separate registration as ESG Ratings and Data Products Providers under IFSCA, ensuring regulatory clarity and functional segregation between traditional credit ratings and ESG-focused services.

The regulatory framework thus allows CRAs to build diversified, globally relevant service offerings while maintaining regulatory discipline.

Governance, Compliance & Technology Framework

IFSCA imposes stringent governance, compliance, and operational standards on CRAs to safeguard independence, credibility, and market integrity.

Governance Structure

Key governance requirements include:

• A minimum board size of three directors, with at least one-third independent directors.
• Majority of directors possessing financial services expertise.
• Appointment of a Principal Officer and Compliance Officer, both based in IFSC and meeting prescribed qualifications.

Where CRAs are also registered for ESG or other regulated activities, common officers may be appointed, subject to compliance.

Credit Rating Process & Independence

CRAs must:

• Establish a detailed Operations Manual covering rating criteria, processes, methodologies, and controls.
• Disclose rating criteria and methodologies publicly.
• Ensure all rating decisions are taken by a qualified Rating Committee.
• Maintain strict confidentiality controls and separation between rating and commercial functions.
• Implement robust policies for avoidance of conflicts of interest, prohibition on trading, and analyst independence.

Compensation of analysts must not be linked to revenue from rated entities, reinforcing objectivity.

Compliance & Reporting

CRAs are required to:

• Comply with KYC, AML, and CFT Guidelines and register on the FIU-IND FINGate portal.
• Make extensive periodic and continuous disclosures, including default rates and rating transition matrices.
• Submit quarterly regulatory reports.
• Conduct an annual compliance audit by eligible professionals.
• Obtain prior approval or provide intimation to IFSCA for any change in control.

Technology & Cyber Resilience

CRAs must implement a cyber security and cyber resilience framework, proportionate to the scale and complexity of operations. This includes protection of sensitive issuer data, rating models, and internal systems, ensuring continuity of critical rating functions.

Key Takeaways for Market Participants

The IFSCA framework for Credit Rating Agencies offers several strategic insights:

• IFSC provides a globally aligned regulatory platform for credit rating and analytical services.
• Strong emphasis is placed on independence, transparency, and governance.
• CRAs can offer diversified services, including valuation and monitoring, within a single regulatory ecosystem.
• SEBI-registered CRAs gain a structured route to internationalise operations through IFSC.
• Compliance, disclosures, and technology resilience are continuous obligations, not procedural formalities.

For global CRAs, financial institutions, and rating professionals, GIFT IFSC presents a credible platform to serve international markets while operating under a robust regulatory regime.

Conclusion

The Master Circular for Credit Rating Agencies in IFSC, read with the IFSCA Capital Market Intermediaries Regulations, 2025, establishes a comprehensive and future-ready regulatory framework for rating activities in GIFT City. It balances market development with investor protection, transparency, and international best practices.

Entities seeking IFSCA Credit Rating Agency Registration in GIFT City must adopt a disciplined approach to governance, compliance, rating integrity, and cyber resilience. With the right regulatory alignment and operational readiness, CRAs can play a pivotal role in strengthening IFSC’s debt and capital market ecosystem, reinforcing GIFT City’s position as a global financial centre.