SEBI Allows GIFT City Brokers Operate Without Prior Approval

Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/61; Dated: 02.05.2025

The Securities and Exchange Board of India (SEBI) has introduced a significant relaxation for stock brokers operating in the Gujarat International Finance Tec-City International Financial Services Centre (GIFT-IFSC). This move is expected to enhance ease of doing business and foster greater participation in India’s international financial hub.

1. No Prior SEBI Approval Required

SEBI has clarified that stock brokers no longer need its prior approval to undertake securities market-related activities in GIFT-IFSC. This regulatory relief streamlines the operational process and removes procedural hurdles for market participants.

2. Operations Through Separate Business Units (SBUs)

Stock brokers may carry out such activities by establishing a Separate Business Unit (SBU) within the stock broking entity. An SBU allows segregation of activities and helps in efficient management of operations dedicated to the IFSC jurisdiction.

3. Flexibility to Use Branches as SBUs

In addition to forming new units, SEBI permits existing branches of stock broking entities to function as SBUs, provided they meet the necessary conditions. This offers firms flexibility in structuring their operations based on business needs.

4. Subsidiary Model Continues

SEBI has also affirmed that the existing model of undertaking activities through a wholly owned subsidiary remains valid. This ensures continuity for entities already operating in GIFT-IFSC under the subsidiary structure.

5. Implication

These regulatory relaxations aim to –

• Promote operational efficiency for stock brokers in GIFT-IFSC;
• Attract global market participants to India’s international financial services zone;
• Encourage innovation and competitiveness by offering more business structuring choices.

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