IFSCA ESG Ratings and Data Products Provider Registration in GIFT City: A Comprehensive Regulatory, Governance, and Compliance Guide

Introduction & Regulatory Framework

Environmental, Social, and Governance (ESG) considerations have become central to global capital allocation, risk assessment, and investor decision-making. As GIFT City IFSC positions itself as an international hub for sustainable finance, the role of ESG Ratings and Data Products Providers (ERDPPs) has gained significant regulatory and commercial importance.

To ensure transparency, credibility, and consistency in ESG-related services, the International Financial Services Centres Authority (IFSCA) has notified the IFSCA (Capital Market Intermediaries) Regulations, 2025, supplemented by the Master Circular for ESG Ratings and Data Products Providers in IFSC, issued on August 05, 2025. This Master Circular provides a consolidated regulatory framework governing registration, permissible activities, governance standards, disclosures, and compliance obligations for ERDPPs operating in GIFT IFSC.

IFSCA ESG Ratings and Data Products Provider Registration in GIFT City establishes a structured and globally aligned regime, drawing from IOSCO recommendations and international best practices, while addressing the specific requirements of an international financial centre.

Permissible Activities & Business Scope for ESG Ratings and Data Products Providers

An ERDPP registered with IFSCA is permitted to provide ESG-related services in IFSC and approved foreign jurisdictions, subject to strict regulatory oversight.

Core Permissible Activities

Registered ERDPPs may:

• Provide ESG ratings for issuers, financial products, and instruments.
• Offer ESG data products, analytics, and related research.
• Disseminate ESG assessments to investors, issuers, and market participants.
• Undertake ESG-related services in IFSC or foreign jurisdictions, subject to compliance with IFSCA regulations.

SEBI-Registered ESG Rating Providers

ESG Rating Providers already registered with SEBI are permitted to undertake ESG rating activities in IFSC, provided they obtain registration with IFSCA through the SWIT System. Once registered, their IFSC activities fall entirely under IFSCA’s regulatory jurisdiction.

Regulatory Boundaries

ERDPPs are:

• Restricted from providing any additional services without prior approval of IFSCA.
• Required to obtain separate registration if undertaking other regulated activities under the CMI Regulations.

This clear demarcation ensures functional clarity and mitigates conflicts between ESG ratings, data products, and other advisory or commercial activities.

Governance, Compliance & Technology Framework

IFSCA places strong emphasis on governance integrity, transparency, and operational resilience for ESG Ratings and Data Products Providers.

Governance Requirements

Each ERDPP must appoint:

• A Principal Officer, responsible for overall operations and regulatory accountability.
• A Compliance Officer, responsible for ensuring adherence to IFSCA regulations and circulars.

Both officers must be based in IFSC and meet prescribed qualification and experience requirements. Where an ERDPP is also registered as a Credit Rating Agency registered with IFSCA, common officers may be appointed, subject to compliance.

Code of Conduct & Independence

ERDPPs are required to:

• Adhere to the Code of Conduct under the CMI Regulations on a “comply or explain” basis.
• Align internal practices with IOSCO recommendations and the ICMA-led voluntary Code of Conduct.
• Publicly disclose compliance status with the Code of Conduct on their website.
• Maintain segregation between ESG ratings, ESG data products, and other activities to avoid conflicts of interest.

ESG Ratings Process & Disclosures

ERDPPs providing ESG ratings must:

• Establish and disclose rating methodologies, criteria, and processes.
• Publicly disclose all ESG ratings issued by them.
• Maintain transparency in methodologies and data sources used.

Compliance & Reporting

Key compliance obligations include:

• Compliance with KYC, AML, and CFT Guidelines issued by IFSCA.
• Mandatory registration on the FIU-IND FINGate portal.
• Submission of quarterly regulatory reports.
• Conduct of an annual compliance audit by eligible professionals.
• Prior approval or intimation to IFSCA for any change in control.
• Establishment of grievance redressal mechanisms and internal outsourcing policies.

Technology & Cyber Resilience

Given the data-intensive nature of ESG services, ERDPPs must implement a robust cyber security and cyber resilience framework, proportionate to:

• Scale and complexity of operations,
• Nature of ESG data and analytics,
• Exposure to systemic and cyber risks.

Key Takeaways for Market Participants

The IFSCA framework for ESG Ratings and Data Products Providers offers several strategic insights:

• ESG services in IFSC are subject to formal regulatory oversight, enhancing market credibility.
• Strong emphasis is placed on transparency, governance, and conflict management.
• Global ESG providers gain a structured pathway to operate in India’s IFSC ecosystem.
• Segregation of activities and disclosure of methodologies are central regulatory expectations.
• Compliance and technology resilience are ongoing obligations, not procedural formalities.

For global ESG rating firms, data analytics companies, and sustainable finance platforms, GIFT IFSC offers a credible and regulated environment aligned with international standards.

Conclusion

The Master Circular for ESG Ratings and Data Products Providers in IFSC, read with the IFSCA Capital Market Intermediaries Regulations, 2025, establishes a comprehensive and forward-looking regulatory framework for ESG services in GIFT City. It reinforces transparency, independence, and investor confidence in ESG assessments and data products.

Entities seeking IFSCA ESG Ratings and Data Products Provider Registration in GIFT City must adopt a disciplined approach encompassing governance, compliance, methodology transparency, and cyber resilience. With appropriate regulatory alignment, ERDPPs can play a pivotal role in advancing sustainable finance and responsible investment within IFSC’s global financial ecosystem.