Introduction
In a landmark move, the International Financial Services Centres Authority (IFSCA) has notified the International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025, setting a foundational regulatory framework for the integration of technology-driven entities—referred to as TechFins—into the international financial ecosystem hosted at GIFT City.
International Financial Services Centres Authority (TechFin and Ancillary Services) Regulations, 2025
Understanding the Ecosystem
The 2025 regulations apply to TechFins and Ancillary Service Providers that aim to operate within the IFSC framework.
Who are TechFins?
- TechFins are entities that leverage advanced technology—such as AI, blockchain, data analytics, and machine learning—to provide or support financial services, either independently or in collaboration with licensed financial institutions.
- Unlike traditional FinTechs, TechFins are tech-first players that move into finance from a technology base.
- Examples: Jio Financial Services, PhonePe, Google Pay, Tata Neu, etc.
Who are Ancillary Service Providers?
- Ancillary Service Providers are non-financial tech entities that offer critical support services to financial institutions operating in the IFSCA. These include providers of cloud computing, cybersecurity, TegTech, SupTech, fraud detection, digital identity verification, data analytics, and similar technology-driven solutions that facilitate or enhance financial operations.
- Examples: AWS India (Cloud Service Provider), Signzy, IDfy (RegTech/ SupTech Companies), Cybersecurity & fraud detection platforms, etc.
Understanding the FinTech-TechFin Divide
| Particulars | FinTech | TechFin |
|---|---|---|
| Core Origin | Finance First | Finance First |
| Primary Goal | Improve financial services | Enhance digital ecosystem |
| Main Offering | Financial products/ services | Embedded financial features |
| Regulatory Start Point | Finance regulated from inception | Often unregulated initially |
| Compliance Focus | AML, KYC, transaction monitoring | Data use, platform behaviour, embedded finance |
| Supervisory Body | Financial Regulators | Tech & Financial Regulators |
| Examples | Square, Robinhood, Stripe | Google Pay, Amazon Pay, Jio Financial Services |
Step-By-Step: Process of Registration
- Application submission via IFSCA portal
- Preliminary review & eligibility check
- Evaluation by IFSCA based on innovation, tech use, risk
- Registration issuance or sandbox placement
Note
- Applicant must comply with regulations and approval conditions within 180 days, unless an extension is granted by the Authority.
- TechFin and Ancillary Service Provider shall:
- Abide by the Code of Conduct specified in the Fourth Schedule of TAS Regulations
- Only serve Non-resident intermediaries or recipients from jurisdictions not listed by FATF as High-Risk or under action
- Carry out its operation in any of the Specified Foreign Currency.
Key highlights include:
Fit & Proper Requirements
TechFins & Ancillary Service Providers to ensure its directors, KMPs and controlling shareholders, at all times, meet “Fit & Proper” standards, demonstrating integrity, financial soundness, and no records of serious offences, disqualifications or regulatory actions.
Key Personnel Obligations
Appoint or designate one of its existing officers as:
- Principal Officer, who shall be responsible for its overall activities
- Compliance Officer, who shall be responsible for compliance of policies, procedures, maintenance of records, etc.
Payment of Recurring Fees
Pay Conditional recurring fee as under:
- Within 15 days of grant of license, registration, recognition,or authorization (For FY in which such license or authorization is granted)
- For subsequent FYs, by 30th April of next FY (Computed based on actual TO/ No. of employees for the FY)
Note
Principal officer and compliance officer shall be full-time employees of TechFin and Ancillary Service Provider and based in IFSC.
Abbreviations
- IFSCA-International Financial Services Centres Authority
- GIFT- Gujarat International Finance Tec-City
- FATF- Financial Action Task Force
- FY- Financial Year
- KMP- Key Managerial Personnel
- TO- Turn Over
- AML- Anti Money Laundering
- KYC- Know Your Customers
References
Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.