IFSCA Revises Credit Rating Agency Rules for GIFT City IFSC

What was decided

The International Financial Services Centres Authority (IFSCA) revised the credit rating framework for the International Financial Services Centre in GIFT City, Gujarat, through Circular No. IFSCA-CMIR/1/2026-CMIR dated 16 July 2026. The circular amended the Master Circular for Credit Rating Agencies in the IFSC dated 5 August 2025 and became effective immediately.

An International Financial Services Centre (IFSC) is a designated financial zone that provides services to residents and non-residents under a separate regulatory framework, and GIFT City, or Gujarat International Finance Tec-City, is India's first operational IFSC, functioning under the regulatory jurisdiction of the IFSCA. Credit Rating Agencies (CRAs) assess the creditworthiness of debt instruments, issuers, and financial obligations.

Regulatory background

This is not a new rulebook but the latest amendment in a sequence of IFSCA circulars governing CRAs in the IFSC. On August 05, 2025, IFSCA released a new Master Circular for Credit Rating Agencies operating in the IFSC, which superseded the previous one from October 1, 2024, providing a consolidated regulatory framework for registration, regulation and supervision under the IFSCA (Capital Market Intermediaries) Regulations, 2025. All actions, applications, and decisions made under the previous circular were considered valid under the new one.

The October 2024 version had itself been issued on October 1, 2024, consolidating existing guidelines and superseding earlier Securities and Exchange Board of India (SEBI) circulars, as per the IFSCA (Capital Market Intermediaries) Regulations, 2021. The 16 July 2026 circular is the next step in this chain, refining the August 2025 master circular rather than replacing it wholesale.

Operative details: what changed

• Rationale-backed rating actions: Under the revised framework, CRAs must disseminate rating actions with a rationale and must allow issuers to review factual errors before publication of the rating.
• Limited scope of issuer review: The issuer review requirement applies only to factual errors and does not extend to unsolicited ratings or private credit rating assignments.
• Documented reasoning before release: The circular keeps the publication process linked to documented reasoning and factual verification before release.
• Stricter record-keeping: The revised framework introduces stricter record-keeping requirements for CRAs, requiring records to be accurate, detailed, and comprehensive enough to reconstruct the credit rating process, including summaries of material considerations and analytical reasoning.
• Regulatory basis for records: The records must be maintained in line with the IFSCA (Capital Market Intermediaries) Regulations, 2025.
• International alignment: The framework also aligns the IFSC credit rating regime more closely with standards associated with the International Organisation of Securities Commissions (IOSCO).

Practical effect for CRAs and issuers in GIFT City

For credit rating agencies registered in the GIFT City IFSC, the amendment means rating decisions now need a documented, verifiable audit trail — from the analytical basis for a rating to the process used to check issuer-flagged factual errors. Because the change took effect the same day it was issued, CRAs operating in the IFSC had no transition window and needed to align internal review and record-keeping processes immediately.

For issuers of rated instruments in the IFSC, the change formalises a right to flag factual errors before a rating is published — but this right stops short of giving issuers influence over the substance of unsolicited ratings or private rating assignments, preserving CRA independence on those categories.

The broader effect is regulatory: by tying the IFSC's CRA framework more closely to IOSCO norms and by mandating reconstructable rating files, IFSCA is signalling that GIFT City's rating agencies are expected to meet international benchmarks for transparency and accountability as the centre's debt-listing and fund-raising activity grows.

About the issuing authority

The International Financial Services Centres Authority (IFSCA) has been established on April 27, 2020 under the International Financial Services Centres Authority Act, 2019, and is headquartered at GIFT City, Gandhinagar in Gujarat. As the dynamic nature of business in the IFSCs requires a high degree of inter-regulatory coordination within the financial sector, the IFSCA has been established as a unified regulator with a holistic vision in order to promote ease of doing business in IFSC and provide world class regulatory environment.