IFSCA notifies its own market-abuse code for the IFSC: insider trading and unfair trade practices barred; SEBI’s 2015 and 2003 regulations cease to apply there

What has been notified

By notification IFSCA/GN/2026/012 dated 25 August 2026, the International Financial Services Centres Authority has made the IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026. They come into force on the date of publication in the Official Gazette. The stated objective is a framework for prohibiting market abuse in the securities market in the IFSC, to protect investors.

“Market abuse” means unlawful behaviour in the securities market and includes insider trading and manipulative, fraudulent and unfair trade practices.

Insiders and material non-public information

An “insider” is a connected person, or anyone in possession of or having access to material non-public information (also called unpublished price sensitive information). A “connected person” is one who is, or was in the six months before the act, associated with the entity in any capacity, including through a contractual, fiduciary, employment, professional or business relationship that gives access to such information.

Material non-public information ordinarily includes financial results, dividends, change in capital structure, mergers and acquisitions, changes in key managerial personnel, proposed fund raising, fraud or default, insolvency proceedings, forensic audits and regulatory action.

• Communication: no insider may communicate or give access to such information except for legitimate purposes, performance of duties or discharge of legal obligations. A person who receives it for a legitimate purpose becomes an insider.
• Trading: no insider may trade, or cause any other person to trade, in listed or to-be-listed securities while in possession of such information. A trade made while holding the information is presumed to have been made on its basis.

The person may explain the trade by showing circumstances such as an off-market transfer or block deal between insiders holding the same information, a statutory or regulatory obligation, exercise of stock options at a pre-determined price, separation between those holding the information and those taking trading decisions in a non-individual insider, or an irrevocable trading plan disclosed to the exchange at least 120 days in advance.

Disclosure by designated persons

Manipulative, fraudulent and unfair trade practices

No person may deal in securities in a fraudulent manner or use any manipulative or deceptive device. The regulations give a non-exhaustive list of practices deemed manipulative, fraudulent or unfair, among them:

• creating a false or misleading appearance of trading, circular transactions, and buying and selling at the same price to inflate activity;
• repeatedly placing and cancelling orders with no intent to execute;
• planting false or misleading news, spreading rumours, or disseminating advice known to be false through any media;
• orders placed while holding non-public information about a substantial impending transaction;
• mis-selling of securities or services;
• manipulating books of account or diverting an entity’s assets so as to manipulate its share price.

Consequences

A contravention is dealt with under the corresponding provisions of the IFSCA Act, 2019. Against a person it regulates, the Authority may in addition issue a warning or censure, or suspend or cancel registration.

What listed entities should do

Put in place internal controls and a code of conduct covering identification and confidentiality of material non-public information, restrictions on its procurement and communication, identification of employees with access, and periodic review of the controls; and adopt a policy for disclosures by designated persons.