Net Worth Requirements under IFSCA (CMI) Regulations, 2025

The Capital Market Intermediaries (CMI) Regulations, 2025, introduced by the International Financial Services Centres Authority (IFSCA), provide a robust framework for intermediaries operating in GIFT City IFSC. A crucial pillar of this framework is the Net Worth Requirement, which ensures intermediaries maintain adequate financial health and investor confidence.

While the initial compliance deadline was October 1, 2025, IFSCA has now extended it to December 31, 2025, allowing entities more time to align their capital structure and documentation.

Why Net Worth Compliance Matters

Net worth isn’t just a licensing prerequisite — it’s a continuous compliance condition. Maintaining the required levels consistently supports:

• Financial resilience of intermediaries
• Market stability during volatility
• Enhanced credibility with global investors
• Eligibility for continued registration and renewals

Defining Net Worth under IFSCA CMI Regulations

Standard Formula:

Net Worth = Paid-up share capital + Free reserves – Accumulated losses – Miscellaneous expenditure not written off

For Broker Dealers, Clearing Members, and Investment Bankers:

Net worth must consist only of liquid assets, including:

• Cash and bank balances
• Fixed deposits
• Government securities
• Other IFSCA-approved instruments

Excluded: Revaluation reserves, depreciation write-backs, or amalgamation reserves.

Minimum Net Worth by Category

Global Access Providers (GAPs) – Special Provisions

For intermediaries under the Global Access Framework, net worth must be:

• Earmarked exclusively for global access operations
• Maintained separately from other activities
• Aligned with IFSCA circulars, generally starting from USD 500,000 for high-tier models

Core Compliance Principles

• Continuous compliance: Maintain prescribed net worth levels at all times
• Highest threshold rule: Entities with multiple registrations must maintain the highest applicable requirement
• Foreign parent branches: Parent-level capital must be earmarked for IFSC operations with proper documentation
• Separate obligations: IFSC net worth is in addition to any domestic capital requirements
• Record-keeping: Maintain quarterly and annual net worth statements for inspection readiness

Transition Timeline

• Original Deadline: October 1, 2025
• Extended Deadline: December 31, 2025

This extension provides time for intermediaries to finalize capital infusions, board approvals, and compliance documentation before the new cutoff.

Regulatory Update – IFSCA Circular on Computation of Liquid Net Worth (30 December 2025)

The International Financial Services Centres Authority (IFSCA), vide Circular No. IFSCA-PLNP/80/2024-Capital Markets dated 30 December 2025, has issued important clarifications on the computation of liquid net worth under the IFSCA (Capital Market Intermediaries) Regulations, 2025.

The circular provides operational clarity for intermediaries, particularly broker dealers and clearing members, and addresses practical concerns surrounding capital computation for compliance purposes.

Key Clarifications Issued by IFSCA

Base Capital & Interest-Free Deposits Included
Base minimum capital and interest-free deposits maintained with recognised stock exchanges and clearing corporations shall be treated as part of liquid net worth.

Margins Recognised as Liquid Net Worth
Margins maintained by broker dealers and clearing members in relation to their trading activities—whether under IFSC operations or Global Access—shall also qualify as part of liquid net worth.

Liabilities Excluded from Net Worth Computation
While calculating net worth, liabilities are to be excluded, in line with the definition provided under the CMI Regulations. Accordingly, only eligible assets are considered for determining “liquid” net worth.

Immediate Applicability
The circular has come into force with immediate effect, reinforcing clarity and uniformity in compliance assessments across IFSC intermediaries.

This clarification significantly enhances regulatory certainty, particularly for entities with active trading operations and margin-based exposure structures, ensuring that genuine operational capital is appropriately recognised for compliance purposes.

Frequently Asked Questions (FAQs)

Q1. What counts as liquid assets?
A. Cash, bank balances, fixed deposits, government securities, and other notified liquid instruments.

Q2. How can foreign parents earmark funds for IFSC branches?
A. Through board-approved allocations and clear supporting documentation identifying IFSC-designated capital.

Q3. What if an entity holds multiple registrations?
A. It must comply with the highest applicable net worth requirement among them.

Expert Insights – Nexpective Advisors’ Perspective

With deep specialization in IFSC regulatory compliance, Nexpective Advisors supports intermediaries in navigating IFSCA’s evolving financial ecosystem.

• Expertise: Chartered Accountants, Company Secretaries, and financial consultants with hands-on IFSC experience
• Presence: Based in GIFT City, Gandhinagar, with access to IFSCA’s operating environment
• Experience: Assisting multiple registered entities with net worth certification and compliance alignment
• Advisory scope: Covering compliance, audit, valuation, and capital markets regulations

Conclusion – Preparing for Net Worth Readiness

Net worth compliance under IFSCA CMI Regulations, 2025 is a cornerstone for sustainable growth and credibility in GIFT City.

With the compliance window now extended to December 31, 2025, intermediaries should act swiftly to evaluate readiness and document adequacy.

Nexpective Advisors provides structured assistance — from capital adequacy assessments to certification and compliance support — helping entities achieve seamless adherence to IFSCA norms.

Contact Nexpective Advisors for net worth compliance guidance, certification, and tailored advisory solutions for GIFT City intermediaries.