TechFin and Ancillary Services in GIFT City: A Regulatory and Business Framework under IFSCA

Introduction & Regulatory Framework

GIFT City IFSC has evolved into a comprehensive international financial ecosystem, supporting not only regulated financial institutions but also the technology and support service providers that enable them to operate efficiently. As financial services become increasingly digital, modular, and globally interconnected, the importance of regulated TechFin and Ancillary Services in GIFT City has grown substantially.

To address this need, the International Financial Services Centres Authority (IFSCA) introduced the IFSCA (TechFin and Ancillary Services) Regulations, 2025 under the IFSCA Act, 2019. These regulations establish a formal regulatory framework for entities providing technology-driven financial solutions and auxiliary support services to IFSC-based financial institutions.

The framework aims to encourage innovation, attract global capability centres, and ensure that enabling service providers operate with appropriate governance, transparency, and regulatory oversight within IFSC.

Permissible Activities & Business Scope for TechFin and Ancillary Service Providers

The 2025 Regulations clearly distinguish between TechFin services and Ancillary services, while allowing flexibility for diverse business models that support regulated financial activities in IFSC.

TechFin Services – Technology Enablement of Financial Services

TechFin services refer to technology solutions and platforms that directly or indirectly enable the provision of regulated financial services. These services are central to the digital transformation of financial institutions operating in GIFT City.

Permissible TechFin activities include:

• Core financial technology platforms supporting banking, capital markets, insurance, and fund management operations
• Payment, clearing, and settlement technology, including infrastructure supporting cross-border transactions
• RegTech and SupTech solutions, such as compliance monitoring, transaction surveillance, regulatory reporting automation, and audit trail systems
• Risk management and analytics platforms, including credit risk, market risk, liquidity risk, and stress testing tools
• Data analytics, artificial intelligence, and machine learning solutions used for investment analysis, underwriting, fraud detection, and portfolio management
• Cyber security and information security solutions tailored for financial institutions, including SOC services, threat intelligence, and incident response
• APIs, middleware, and integration services connecting financial institutions with exchanges, custodians, depositories, and third-party service providers

These services allow financial institutions to operate efficiently while meeting stringent regulatory and risk management requirements.

Ancillary Services – Operational and Professional Support

Ancillary Services cover non-core but essential support functions that enable financial institutions to deliver regulated services effectively. These services are particularly relevant for shared service centres, professional firms, and global capability centres operating from IFSC.

Permissible Ancillary services include:

• Accounting, bookkeeping, and financial reporting support
• Compliance support services, including regulatory filings, monitoring, and documentation
• KYC, AML, and customer onboarding services, including data verification and screening support
• Back-office and middle-office operations, such as transaction processing, reconciliation, and reporting
• Legal and documentation support, including contract management and transaction documentation
• Valuation, data processing, and financial information utilities
• Operational risk management and internal control support services

Ancillary Service Providers act as enablers, ensuring that regulated entities can focus on core financial activities while maintaining compliance and operational efficiency.

Service Delivery Models and Regulatory Boundaries

Under the Regulations:

• Services may be provided directly to regulated IFSC entities or through intermediaries, provided service flows are transparent and traceable
• TechFin and Ancillary Service Providers cannot undertake regulated financial activities unless separately registered
• Any expansion into additional regulated activities requires prior approval from IFSCA

This ensures innovation without regulatory arbitrage.

Governance, Compliance & Technology Framework

IFSCA adopts a proportionate but structured approach to governance and compliance for TechFin and Ancillary Service Providers.

Key requirements include:

• Registration through the Single Window IT System (SWIT)
• Appointment of a Principal Officer responsible for overall operations
• Appointment of a Compliance Officer responsible for regulatory adherence
• Continuous satisfaction of fit and proper criteria by promoters and key management
• Intimation or approval requirements for change in control
• Maintenance of internal policies on outsourcing, data protection, and service continuity

Technology & Cyber Security

Given the critical nature of technology-enabled services, entities must implement a cyber security and cyber resilience framework proportionate to:

• Scale of operations
• Sensitivity of data handled
• Criticality of services provided

This includes data protection controls, incident response mechanisms, and business continuity planning.

Key Takeaways for Market Participants

• GIFT City provides a regulated ecosystem for TechFin and Ancillary Service Providers supporting global financial institutions
• Clear regulatory recognition enhances credibility, scalability, and investor confidence
• The framework supports fintech firms, GCCs, shared service centres, and professional service providers
• Compliance obligations are continuous but proportionate to business scale
• Early structuring and regulatory alignment reduce operational and regulatory risk

Conclusion

The TechFin and Ancillary Services in GIFT City framework represents a strategic expansion of IFSC’s regulatory architecture, recognising the critical role of technology and support services in modern financial markets. The IFSCA (TechFin and Ancillary Services) Regulations, 2025 provide clarity, flexibility, and global alignment while maintaining regulatory discipline.

Entities seeking to establish or expand TechFin and Ancillary operations in GIFT IFSC must adopt a structured approach to governance, compliance, and technology resilience. With the right regulatory alignment, GIFT City offers a compelling platform to serve global financial institutions from India’s international financial hub.