CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/61 May 2, 2025
To,
All recognized Stock Exchanges
Stock Brokers through Recognized Stock Exchanges
Dear Madam / Sir,
Sub: Measure for Ease of Doing Business – Facilitation to SEBI registered Stock
Brokers to undertake securities market related activities in Gujarat International
Finance Tech-city – International Financial Services Centre (GIFT-IFSC) under a
Separate Business Unit (SBU)
1. In order to facilitate SEBI registered stock brokers to undertake securities market
related activities in Gujarat International Finance Tech-city – International Financial
Services Centre (GIFT-IFSC), it has been decided to do away with the requirement
of obtaining specific approval from SEBI.
2. Stock brokers proposing to undertake securities market related activities in GIFT-
IFSC are permitted to do so under a Separate Business Unit (SBU) of the stock
broking entity itself. These activities can also be carried out if the branch qualifies
as an SBU.
3. Existing practice of carrying out securities market related activities in GIFT-IFSC
through a subsidiary is also allowed. Thus, the form in which these activities are to
be carried out is at the discretion of the entity.
4. The matters related to policy, eligibility criteria, risk management, investor
grievances, inspection, enforcement, claims etc. for SBU in GIFT-IFSC would be
specified under the regulatory framework issued by the concerned regulatory
authority and all activities of the SBU in GIFT-IFSC would be under the jurisdiction
of that regulatory authority.
5. In pursuance of the above regulatory jurisdiction, to demarcate the regulatory
obligations and to ring fence the activities of the stock brokers in Indian securities
market and that of SBU in GIFT-IFSC, some of the key safeguards are being
prescribed as under:
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5.1 Stock brokers shall ensure that securities market related activities of the
SBU in GIFT-IFSC are segregated and ring-fenced from the Indian
securities market related activities of the stock broker and arms-length
relationship between these activities is maintained.
5.2 Such SBU in GIFT-IFSC shall be exclusively engaged in providing
securities market related activities as permitted by the IFSCA. Further
that, the activities to be carried out by the SBU shall be as permitted by
the IFSCA.
5.3 Stock brokers shall prepare and maintain a separate account for the
SBU on arms-length basis.
5.4 The net worth of the SBU shall be kept segregated from the net worth of
the stock broker in the Indian securities market. Net worth criteria for
stock broker shall be satisfied after excluding account of the SBU. The
net worth for the purpose of the SBU shall be as per regulatory
framework issued by the concerned regulatory authority.
6. As the activities of the SBU shall be under the jurisdiction of another regulatory
authority, Grievance Redressal Mechanism and Investor Protection Fund (IPF) of
the stock exchanges and SCORES shall not be available for investors availing the
services of the SBU.
7. Stock brokers who have already floated subsidiary or entered into joint venture to
undertake securities market related activities in GIFT-IFSC after obtaining approval
from SEBI, shall have an option to dismantle at its discretion, such subsidiary/joint
venture and carry out such services under an SBU of the stock broking entity itself.
8. This circular is issued in exercise of powers conferred under Section 11(1) of
Chapter IV of the Securities and Exchange Board of India Act, 1992, read with
regulation 30 of the SEBI (Stock Brokers) Regulations 1992 to protect the interests
of investors in securities and to promote the development of, and to regulate the
securities markets.
9. This circular is available on SEBI website at www.sebi.gov.in under the
category: ‘Legal → Circulars’.
Yours faithfully,
Aradhana Verma
General Manager
Tel. No.: 022-26449633
E-mail: aradhanad@sebi.gov.in
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