Overview: The International Financial Services Centres Authority (IFSCA) has issued a consultation paper, proposing a framework for research entities in GIFT IFSC to offer model portfolios. These portfolios would contain baskets of securities with recommended weightages. The proposal seeks to recognise them as research recommendations under the IFSCA (Capital Market Intermediaries) Regulations, 2025, subject to registration, disclosure and audit requirements. Stakeholders can submit comments until 30th November, 2026.
The International Financial Services Centres Authority (IFSCA) has proposed a framework allowing research entities in GIFT IFSC to offer model portfolios. Through its consultation paper of 9th November, 2026, the regulator has proposed treating these portfolios as research recommendations under the IFSCA (Capital Market Intermediaries) Regulations, 2025. The proposal sets out registration, disclosure and compliance requirements for entities offering such portfolios.
The proposal could expand the investment research products available from GIFT IFSC. It also sets out conditions for research entities and broker-dealers seeking to offer these portfolios.
Rationale for Proposing Model Portfolios
The CMI Regulations 2025 provide for research entities to issue reports on securities, including buy, sell and hold recommendations. However, they do not expressly cover model portfolios.
Industry participants have requested a framework for offering baskets of securities based on defined investment strategies or themes.
A model portfolio would comprise a basket of securities for which the research report recommends the weightage of one or more securities. A list of recommended securities without any specified weightages would not be treated as a model portfolio.
Such portfolios are expected to be largely global and multi-asset, potentially covering international equities, fixed-income exchange-traded funds (ETFs) and commodity ETFs.
Required Registration
Any entity intending to offer model portfolios, including an existing broker-dealer, would need to register as a Research Entity under the CMI Regulations.
An existing broker-dealer would also need to register as a Research Entity to offer model portfolios. Its broker-dealer registration alone would not cover this activity. This would require an additional regulatory registration. However, that does not mean the incorporation of a separate company.
Proposed Compliance Conditions
The draft circular sets out the following requirements:
- Research reports and factsheets: Each model portfolio must be issued through a formal research report accompanied by a comprehensive factsheet covering basic information, investment rationale and methodology. Opinions on individual securities must not conflict with the entity’s standalone research opinions on those securities.
- Investment methodology: Reports must specify the geographical investment universe, asset classes and, where applicable, the underlying theme. They must also explain the security-selection methods, such as fundamental analysis, technical analysis or quantitative factor-based modelling.
- Portfolio naming and investment horizon: Names must accurately reflect the portfolio type and investment objective. Reports must also state the recommended investment horizon.
- Updates and rebalancing: Reports must specify whether the portfolio will be updated and at what intervals. Rebalancing should generally follow the portfolio’s overall framework and be communicated to clients. If it takes place outside the predefined intervals, the reason must also be communicated.
- Risk disclosure: The research report must clearly disclose the risks associated with the model portfolio.
- Benchmarking and audit: A portfolio may be compared with a benchmark index. If one is used, the index must be clearly identified and applied consistently across all reports. Compliance with the proposed guidelines would be covered by the existing CMI compliance audit framework.
These requirements would apply within the existing regulatory framework for research entities, including the CMI Regulations, 2025 and other applicable requirements under IFSCA’s Master Circular for Research Entities dated 5 August 2025.
Compliance Requirements
Affected entities should review their registration status, research processes and disclosure arrangements. They should also assess whether their systems can document security-selection methods, portfolio weightages, investment rationale and rebalancing decisions.
Businesses planning to enter this activity should consider the registration and compliance requirements before developing their proposed offerings.
IFSCA has invited comments on the draft circular by 30th November, 2026. Submissions must be sent by email in MS Word or MS Excel format to the designated IFSCA officials.
Setindiabiz Support
Businesses planning to establish an eligible entity in GIFT IFSC must consider their legal structure, proposed activities and incorporation requirements.
Setindiabiz supports company incorporation, preparation of constitutional documents, corporate documentation and ongoing statutory compliance. We support businesses setting up in India with incorporation, registrations and ongoing corporate compliance, including eligible entities planning to establish operations in GIFT IFSC.
IFSCA registration as a financial intermediary is a separate regulatory process and remains subject to the Authority’s approval.
FAQs
It is a basket of securities for which a research entity recommends specific weightages for one or more securities.
Yes, under the proposal, but it must also register as a Research Entity.
No. It is still under consultation. The deadline for stakeholder comments is 30th November, 2026.
No. The draft requires recommended weightages for one or more securities in the basket.
The proposal could widen the scope of investment research from GIFT IFSC while setting clearer requirements for registration, disclosures and compliance. Its final provisions will depend on stakeholder feedback and the circular eventually issued by IFSCA.
