Master Circular for Broker Dealers and Clearing Members

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Master Circular for Broker Dealers and Clearing Members — IFSCA/CMD/MIIT/MCBDCM/2026 | IFSCA circular · Complied AI

Summary

What changed

The IFSCA has issued a Master Circular consolidating regulatory requirements for Broker Dealers and Clearing Members operating in the International Financial Services Centre (IFSC). This circular supersedes several previous guidelines, including those related to market access, fee structures, and operational status at disaster recovery sites. It establishes a unified framework covering registration processes via the Single Window IT System, governance standards, supervision and oversight mechanisms, technology-related provisions, and complaint handling. The circular mandates compliance with net worth requirements, periodic reporting, and specific protocols for system audits and cyber resilience. It also clarifies the regulatory framework for market access through Authorized Persons and outlines procedures for the surrender of registration and the release of security deposits.

What you must do

Submit applications for registration exclusively through the Single Window IT System (SWIT System).
Maintain net worth as specified by the Stock Exchange/Clearing Corporation.
Conduct annual system audits and submit reports to the Stock Exchange.
Report technical glitches to the Stock Exchange within one hour of occurrence.
Submit annual compliance audit reports to the IFSCA by September 30th of each year.

Key dates

Effective from: 12 May 2026
Commencement date of the Master Circular: 12 May 2026

Who is affected

Broker Dealers and Clearing Members operating in the IFSC.
Stock Exchanges and Clearing Corporations in the IFSC.

Thresholds

Installed capacity for trading systems must be at least 150% of the observed peak load.
Technical glitch reporting applies to malfunctions lasting five minutes or more.

Exceptions

Master Circular does not apply to global access activities by Broker Dealers.

If you do not comply

Failure to maintain net worth prohibits undertaking new or existing business activities.
Failure to pay registration fees within specified time may lead to closure of the application.

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Document text

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MASTER CIRCULAR IFSCA/CMD/MIIT/MCBDCM/2026

May 12, 2026

To, All Stock Exchanges in the International Financial Services Centre (IFSC); All Clearing Corporations in the IFSC; All Broker Dealers in the IFSC; All Clearing Members in the IFSC.

Madam/Sir,

Subject: Master Circular for Broker Dealers and Clearing Members

Reference may be drawn to the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021, and the circulars issued thereunder.
Subsequently, the International Financial Services Centres Authority (‘Authority’ / ‘IFSCA’) issued the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025 (‘CMI Regulations’) which repealed the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021, while specifying a unified framework for the regulation and supervision of Capital Market Intermediaries, which, inter-alia, includes Broker Dealers and Clearing Members.
The Authority, being satisfied that it is necessary and expedient for ease of doing business and for overall development of the IFSC ecosystem, hereby consolidates all the circulars pertaining to Broker Dealers and Clearing Members and issues this Master Circular.
(i) On and from the date of commencement of this Master Circular, the following circulars issued by the Authority shall stand superseded:

Sr. No.	Date	Circular No.	Subject
1	October 14, 2020	F. No. 68/IFSCA/MRD-AP/2020-21	Market Access through Authorized Persons
2	April 13, 2021	F. No. 286/IFSCA/Policy Matters (CMD-DMIIT)/2021	Fee structure for Market Infrastructure Institutions (MIIs) and Participants
3	September 15, 2021	F. No. 224/IFSCA/CMD-DMIIT/CUST/2021/2	Clearing Membership for non-bank Custodians
4	April 29, 2022	IFSCA/CMD-DMIIT/AP/2022-23/1	Market Access through Authorized Person
5	June 28, 2022	IFSCA/CMD-DMIIT/BD/2022-23/1	Refund of security deposit to Broker Dealers on surrender of membership
6	May 09, 2023	IFSCA/CMD-DMIIT/BCP-DR/2023-24/001	Status of operations at Disaster Recovery (DR) Site of the Broker Dealers and Clearing Members registered with IFSCA
7	March 14, 2024	IFSCA/CMD-DMIIT/SOF/2023-24/001	Ease of doing business: Settlement of Client’s Funds lying with Broker Dealer

(ii) On and from the date of commencement of this Master Circular, all circulars and guidelines issued by the Securities and Exchange Board of India (“SEBI”) prior to October 01, 2020, in respect of a Broker Dealer/Clearing Member registered with the Authority, shall stand superseded.

(iii) This Master Circular shall be applicable to Broker Dealers for their activities on the recognised stock exchanges in the IFSC and is not applicable for the activities related to global access by the Broker Dealers. Global access by the Broker Dealers shall be governed through the separate circulars/regulatory framework issued by the Authority for global access by Broker Dealers.

(iv) Notwithstanding the supersession specified in (i) and (ii) above, a) anything done or any action taken or purported to have been done or taken under the superseded circulars, prior to such supersession, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; and b) any application made to the Authority under any of the superseded circular(s) prior to such supersession shall be deemed to have been made under the corresponding provisions of this Master Circular;

This Master Circular is being issued in exercise of powers conferred by Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, read with regulation 45 of the CMI Regulations and regulation 72 of the IFSCA (Market Infrastructure Institutions) Regulations, 2021, and shall come into force from the date of its issuance.

A copy of this circular is available on the website of the International Financial Services Centres Authority at www.ifsca.gov.in.

Yours faithfully

Praveen Kamat General Manager Division of Market Infrastructure Institutions & Technology Capital Markets Department Email: praveen.kamat@ifsca.gov.in Tel: +91-079-61809820

CHAPTER – I: PROCESS OF REGISTRATION
1. Application for Registration
2. Payment of Fees
3. Validity of Registration
CHAPTER – II: ELIGIBILITY CRITERIA AND PERMISSIBLE ACTIVITIES 4. Eligibility Criteria 5. Permissible Activities 6. Net Worth
CHAPTER – III: GOVERNANCE 7. Principal Officer 8. Compliance Officer 9. Code of Conduct
CHAPTER – IV: SUPERVISION & OVERSIGHT 10. Oversight of Broker Dealers or Clearing Members 11. Running Account Settlement 12. System Audit of Broker Dealers 13. Early Warning Mechanism to Prevent Diversion of Client Securities
CHAPTER – V: DEALING WITH CLIENT 14. Unique Client Code 15. Regulation of Transactions Between Clients and Broker Dealers 16. Market Access through Authorised Persons in foreign jurisdictions 17. Market Access through Authorised Persons in India
CHAPTER – VI: TECHNOLOGY RELATED PROVISIONS 18. Electronic Contract Note (ECN) 19. Testing of software used in or related to trading and Risk Management 20. Safeguards to avoid trading disruption in case of failure of Software Vendor 21. Cyber Security and Cyber Resilience 22. Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by Broker Dealers 23. Framework to address the ‘technical glitches’ in Broker Dealers’ Electronic Trading Systems
CHAPTER – VII: INTERNAL POLICY ON OUTSOURCING OF ACTIVITIES 24. Internal Policy on Outsourcing
CHAPTER – VIII: COMPLAINT HANDLING AND GRIEVANCE REDRESSAL 25. Complaint Handling and Grievance Redressal
CHAPTER – IX: CHANGE IN CONTROL 26. Broker Dealer/Clearing Member operating in the IFSC in Branch Structure
CHAPTER – X: PERIODIC REPORTING TO THE IFSCA BY BROKER DEALER/CLEARING MEMBER 27. Quarterly Reporting 28. Annual Compliance Audit
CHAPTER – XI: SURRENDER OF REGISTRATION 29. Surrender of Registration 30. Refund of security deposit to Broker Dealers on surrender of membership
Annexure - 1
Annexure - 2
Annexure - 3
Annexure - 4
Annexure - 5

CHAPTER – I: PROCESS OF REGISTRATION

1. Application for Registration

1.1. The International Financial Services Centres Authority (IFSCA/the Authority) has operationalised a Single Window IT System (SWIT System/ SWITS), which, inter-alia, contains a Common Application Form (CAF), created by merging several existing forms including business-specific Annexure Forms. The link for accessing the SWITS platform is https://swit.ifsca.gov.in.

1.2. The SWIT System aims to harmonise and simplify the process of submission of application under the Acts specified under the First Schedule of the IFSCA Act, 2019, including any regulations or framework issued thereunder, in addition to the Special Economic Zones (SEZ) Act, 2005. The Application Form (Form-FA) for seeking Letter of Approval (LoA) from the Administrator (IFSCA) under the SEZ Act, 2005 is also the part of the SWITS and is integrated with the SEZ Online System.

1.3. In addition, the SWIT System also provides the facility for an entity to apply for Goods and Services Tax Identification Number (GSTIN), thereby simplifying the tax registration for businesses. Further, the SWIT System also enables the online payment of fees in USD for entities desirous of setting up operations in IFSC.

1.4. An entity desirous of seeking registration as a Broker Dealer/Clearing Member with the Authority shall submit/file its applications exclusively through the SWIT System for seeking: 1.4.1. Registration as Broker Dealer/Clearing Member under the provisions of the CMI Regulations; 1.4.2. Approval from SEZ Authorities and GST registration; and 1.4.3. NoC/requisite approval from appropriate regulators (if any).

1.5. In this regard, for more details, Circular No. IFSCA-ITIn0WEB/1/2023-IT Infrastructure and Fintech- Part (1), titled “Single Window IT System inter-alia for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI”, dated September 30, 2024, issued by the Authority, may be referred to.

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Master Circular for Broker Dealers and Clearing Members

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