ISINs in IFSC: New IFSCA Directions, Compliance Impact & Transition Roadmap

India’s International Financial Services Centre (IFSC) at GIFT City continues to mature as a globally competitive financial hub. A critical pillar of this evolution is the development of a self-contained, robust market infrastructure aligned with international best practices.

In this context, the International Financial Services Centres Authority (IFSCA) has issued an important regulatory direction in February 2026 governing the issuance and holding of International Securities Identification Numbers (ISINs) by IFSC entities. The directive significantly impacts how securities and permitted financial products are dematerialised, identified, and supervised within IFSC.

This article explains the IFSCA ISIN requirements, their compliance implications, and a practical transition roadmap for IFSC units.

Understanding ISINs in the IFSC Context

An International Securities Identification Number (ISIN) is a globally recognised, unique identifier assigned to securities such as equity shares, debt instruments, and other financial products. ISINs are foundational to:

• Dematerialisation and electronic holding of securities
• Clearing and settlement processes
• Regulatory supervision and reporting
• Transparency for investors and market participants

Within IFSC, ISINs play an even more strategic role. They serve as a jurisdictional marker, clearly distinguishing IFSC-issued securities from those issued, settled, and supervised in India’s domestic financial markets.

Regulatory Background: Why IFSCA Issued New Directions

IFSCA has been steadily strengthening the IFSC listing and depository framework to ensure regulatory clarity, operational efficiency, and supervisory independence.

These directions form part of the broader regulatory architecture issued through IFSCA circulars and master directions governing IFSC entities.

While IFSC has its own recognised market infrastructure institutions, it was observed that several IFSC units continued to:

• Obtain ISINs from domestic Indian depositories, and
• Hold IFSC securities outside the IFSC depository ecosystem

This fragmented approach diluted regulatory oversight and conflicted with the objective of building IFSC as a holistic, globally credible financial system. To address this, IFSCA issued formal directions mandating a shift to IFSC-recognised depositories 

Key Directions Issued by IFSCA (February 2026)

Under the new framework, IFSCA has directed that:

1. Mandatory ISIN Issuance Through IFSC Depositories

All IFSC units intending to dematerialise securities or other permitted financial products must obtain ISINs only from a depository recognised by IFSCA.

This requirement applies irrespective of:

• The type of security (equity, debt, or other permitted instruments), or
• Whether the issuer is newly incorporated or already operational in IFSC

2. Transition for Existing IFSC Units

IFSC units that have already obtained ISINs from domestic Indian depositories are required to:

• Obtain new ISINs from an IFSC-recognised depository, and
• Complete the transition on or before 31 August 2026 

3. Continued Use of International Central Securities Depositories (ICSDs)

For the removal of doubt, IFSCA has clarified that issuers may continue to use International Central Securities Depositories for issuance and listing of debt securities and other financial products, where permitted under the IFSCA capital markets regulations 

Compliance Impact on IFSC Entities

The new IFSCA ISIN requirements have a direct and immediate impact on multiple categories of IFSC participants, including:

• Companies issuing equity or hybrid instruments in IFSC
• Debt issuers listing securities on IFSC exchanges
• Fund structures and special purpose vehicles issuing units or instruments
• FinTechs and capital-market intermediaries issuing permitted financial products

From a compliance perspective, the direction affects:

• Dematerialisation of securities in IFSC
• Offering documents, information memoranda, and disclosures
• Custody, settlement, and ongoing regulatory reporting

Entities that delay transition risk operational bottlenecks during listings, corporate actions, audits, or regulatory inspections.

Transition from Domestic ISIN to IFSC ISIN: A Practical Roadmap

To ensure a smooth and compliant transition, IFSC units should adopt a structured approach:

Step 1: ISIN Mapping

Prepare a comprehensive inventory of:

• All outstanding securities and financial products
• Existing ISINs obtained from domestic depositories

Step 2: Applicability Assessment

Determine which securities require:

• Fresh ISIN issuance from an IFSC-recognised depository
• Disclosure updates or investor communication

Step 3: Engagement with IFSC Depository

Initiate onboarding with an IFSC-recognised depository and align on:

• Documentation requirements
• Migration timelines
• Coordination with domestic depositories, if applicable

Step 4: Documentation & Disclosure Updates

Update:

• Offer documents
• Listing applications
• Internal compliance and MIS records

Step 5: Completion Before Deadline

Ensure all transitions are completed well before 31 August 2026, allowing buffer time for reconciliation and regulatory confirmation.

Why This Change Matters for IFSC’s Long-Term Vision

The move to mandate ISIN issuance within IFSC is not merely procedural. It reflects IFSCA’s broader intent to:

• Strengthen supervisory control over IFSC securities
• Reduce reliance on domestic market infrastructure
• Align IFSC with global financial centre practices
• Enhance investor confidence through regulatory clarity

Over time, a unified IFSC depository regulations framework will support deeper capital markets, faster product innovation, and smoother cross-border participation.

Conclusion

The February 2026 IFSCA directions on ISINs mark a structural milestone in the evolution of IFSC’s capital-market ecosystem. For IFSC units, early understanding and proactive transition are essential—not only to remain compliant but also to avoid last-minute disruptions to issuance, listing, or investor transactions.

As IFSC continues its journey toward becoming a globally integrated financial hub, compliance with the new ISIN framework should be viewed as a foundational governance step, reinforcing credibility, transparency, and long-term scalability.