IFSCA Adds UAE, Singapore, Australia and EU to Specified Jurisdictions: IFSC Distributors Can Now Reach Retail Clients

At a Glance

For a distributor in GIFT City, the jurisdiction in which a fund or capital market product is domiciled decides who that product can be sold to. Products from a short list of specified jurisdictions can go to any client, including retail investors; everything else is limited to sophisticated investors. IFSCA has now added four entries to that list — UAE, Singapore, Australia and the European Union — and settled a definitional question about which jurisdiction counts when a product is domiciled in one country and managed from another.

What Changed?

The circular makes two distinct changes to Chapter III of the Master Circular for Distributors in the IFSC: it adds new specified jurisdictions, and it settles what "jurisdiction" actually means in this context.

Why This Matters

Regulation 32(1) of the CMI Regulations, 2025 sets out the distribution activities a Registered Distributor may undertake, and it splits them by where the product or service originates. Under clauses (a) and (c), capital market products and services offered by a regulated financial entity set up in India, the IFSC, a jurisdiction identified in Gazette notification G.S.R. 882(E) dated November 28, 2019 as revised, or any other jurisdiction specified by the Authority, may be distributed to any client in the IFSC, in foreign jurisdictions and in India. Clauses (b) and (d) cover everything else: products from any other foreign jurisdiction may be distributed only to sophisticated investors, which regulation 3(1)(oo) defines as an accredited investor, or a similar investor by whatever name called, in its home jurisdiction.

That framework is what makes paragraph 5.1A commercially significant rather than merely administrative. A fund domiciled in Singapore, the UAE, Australia or an EU member state previously sat in the sophisticated-investor channel for distribution purposes. From September 18, 2026 it sits in the any-client channel, which opens retail distribution of those products through IFSC distributors for the first time.

Paragraph 5.1B then closes the obvious workaround. Because the test is the product's jurisdiction of domicile and not the manager's location, a product domiciled outside the specified list cannot be brought into the any-client channel merely because the entity managing it happens to be set up in a specified jurisdiction.

Who Is Affected?

Detailed Analysis: The New Paragraphs 5.1A and 5.1B

Paragraph 5.1A — The Four Newly Specified Jurisdictions

The Circular inserts paragraph 5.1A into Chapter III of the Master Circular, immediately after the existing paragraph 5.1. For the purposes of clauses (a) and (c) of sub-regulation (1) of regulation 32 of the CMI Regulations, IFSCA specifies four jurisdictions:

The Circular does not reproduce paragraph 5.1, so the four new entries have to be read together with the list already in force. Paragraph 5.1 of the Master Circular carries the foreign jurisdictions identified in Gazette notification G.S.R. 882(E) dated November 28, 2019, as updated to the date of that circular. Read with the new paragraph 5.1A, eleven jurisdictions are now specified for the purposes of regulation 32(1)(a) and (c):

The paragraph 5.1 entries derive from Gazette notification G.S.R. 882(E) dated November 28, 2019, as updated to the date of that circular. Readers should confirm the current paragraph 5.1 list against the Master Circular for Distributors in the IFSC dated August 5, 2025 before relying on it.

The FATF and High-Risk Jurisdiction Proviso

A proviso attached to paragraph 5.1A makes the specification conditional, and it applies equally to the jurisdictions already listed under paragraph 5.1. None of the specified jurisdictions — old or new — may be:

• identified by the Financial Action Task Force (FATF) as a High-Risk Jurisdiction subject to a Call for Action, or as a Jurisdiction under Increased Monitoring; or
• identified by the Central Government as a high-risk jurisdiction for money laundering, terrorist financing or proliferation financing.

This is a continuing condition rather than a one-time check. If any of the named jurisdictions were to later appear on the FATF or Central Government high-risk lists, the specification under paragraph 5.1A would, on the plain language of the proviso, cease to apply to that jurisdiction.

The proviso also creates a practical wrinkle specific to the European Union entry. Paragraph 5.1A specifies the European Union as a bloc, but the FATF and Central Government high-risk lists operate at individual-country level. A distributor cannot treat "European Union" as a blanket clearance for all member states: if a member state appears on the FATF list of Jurisdictions under Increased Monitoring, the proviso operates against products domiciled in that member state even though the bloc as a whole remains specified. Screening therefore needs to resolve to the specific member state of domicile, not stop at "EU".

Paragraph 5.1B — What "Jurisdiction" Actually Means

The Circular's second substantive addition is an interpretive clarification rather than a new rule. Paragraph 5.1B states that, for the purposes of regulation 32(1) of the CMI Regulations, the term "jurisdiction" — in the context of capital market products and/or services — refers to the jurisdiction of domicile of the capital market product or service, and not to the jurisdiction where the entity managing that product or service is located.

IFSCA frames this as being issued "for the removal of doubts," which indicates the Authority intends it as a clarification of the existing regulation 32 framework rather than a substantive policy shift.

Old vs New: Chapter III of the Master Circular

When Does It Apply?

The Circular states plainly that it "shall come into force with immediate effect." No phased rollout, grace period or separate compliance deadline is specified in the source document.

How the Change Came About

The Circular records that the amendment was made on consideration of representations received from stakeholders. It follows a consultation paper IFSCA published in July 2026 proposing this exact expansion, on which public comments were invited until August 7, 2026. Two details from that process carry forward into how the final text should be read.

• The Croatia carve-out was dropped. The consultation proposal specified the "European Union excluding Croatia," mirroring IFSCA's permitted list for video-based customer identification under the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022. Paragraph 5.1A as finally issued specifies the European Union with no exclusion. The FATF proviso now performs that filtering dynamically, rather than by naming a single member state in the text.
• Not every requested jurisdiction was added. Market participants had sought Luxembourg, Ireland, the Cayman Islands and Cyprus, pointing out that UCITS funds established in the United Kingdom, France and Germany were already permitted while equivalent Luxembourg and Ireland funds were not. Luxembourg, Ireland and Cyprus are now captured as European Union member states. The Cayman Islands is not covered by paragraph 5.1A, so Cayman-domiciled products remain in the sophisticated-investor channel.

Practical Implications for Distributors and FMEs

This is an enabling amendment, not a new obligation. Nothing in the Circular requires a Distributor or FME to do anything; it widens what they may do. The one genuinely continuing requirement is the FATF and Central Government high-risk condition in the proviso, which has to be re-tested over time rather than checked once. The work below is therefore operational rather than mandated, but it is not trivial for entities with multi-jurisdictional structures:

• Update internal jurisdiction-screening checklists used before distributing capital market products, so that all eleven specified jurisdictions are captured — the seven under paragraph 5.1 plus UAE, Singapore, Australia and the European Union under paragraph 5.1A.
• Re-assess client-category eligibility for products domiciled in the four added jurisdictions. Products previously offered only to sophisticated investors may now be offered to any client, which brings retail-facing product approval, suitability assessment, disclosure documents, marketing material and distribution agreement terms into scope.
• Re-examine any products or services where the fund's domicile differs from the manager's location, applying paragraph 5.1B's clarification that domicile — not the manager's location — is the relevant jurisdiction.
• Build an ongoing monitoring step against the current FATF list of High-Risk Jurisdictions subject to a Call for Action and Jurisdictions under Increased Monitoring, and against the Central Government's list of high-risk jurisdictions for money laundering, terrorist financing or proliferation financing, since the specification under paragraphs 5.1 and 5.1A depends on continued absence from those lists.
• Flag the clarification in paragraph 5.1B to legal and structuring teams handling cross-border fund distribution arrangements, since it resolves an interpretive question that may have previously required internal legal opinion.

Compliance Checklist

Frequently Asked Questions

CorpLawUpdates Analysis

The four added jurisdictions are the headline, but it is the pairing of 5.1A with 5.1B that makes the amendment coherent. Read together, they say that retail eligibility turns on one checkable fact — where the product is domiciled — and cannot be engineered by routing a non-specified product through a manager established in a specified jurisdiction. On that reading paragraph 5.1B is as much an anti-circumvention provision as a clarification, and it cuts both ways. A Cayman-domiciled fund does not become retail-eligible because its manager now sits in Singapore. A Luxembourg or Ireland UCITS fund does become retail-eligible through the European Union entry, even though neither jurisdiction is named individually anywhere in the Circular — which is a substantially larger opening than the four-line amendment suggests on its face, given the scale of the Luxembourg and Irish fund industries.

One point compliance teams should track going forward is the continuing nature of the FATF/high-risk proviso. Because the specification depends on a jurisdiction's FATF and Central Government status remaining unchanged, a periodic re-verification process — not a one-time check at onboarding — is the only way to stay aligned with the Circular over time.

This article is for informational and educational purposes only and does not constitute legal or regulatory advice. Readers should verify the applicable primary regulatory source before taking action.