About Enforcement

1. Strong regulation that holds individuals and entities accountable and deters misconduct promotes public confidence in financial services and is a key factor in the development of efficient markets, financial services, and economies. Enforcement plays an important role in deterring misconduct and thereby promotes public confidence, consumer protection and market integrity.

   IFSCA’s enforcement function plays a key role in achieving this objective by administering an enforcement regime that fosters high standards of professional conduct and delivers fair and robust enforcement outcomes to deter misconduct and preserve investor confidence. IFSCA’s enforcement approach has following three aims:

   a. To maintain trust and integrity in the IFSC ecosystem by early detection of misconduct and legal violations/breaches of law  

   b. To prevent misconduct by installing strategies for effective deterrence

   c. Shaping market behaviour and conduct of the financial institutions regulated by IFSCA



2. As IFSCA regulates more than 700 financial institutions of varying sizes and systemic importance in IFSC, and is responsible for development, regulation and supervision of regulated entities in IFSC as its primary statutes, it is necessary that IFSCA prioritises its resources in the areas which pose more significant threat to IFSCA’s principal objectives. Therefore, IFSCA carefully considers how to respond to all potential breaches of the law, and formal investigation of a matter is only undertaken after careful consideration of a range of factors, which include:

   The seriousness of the misconduct, including the extent of harm or loss caused by the misconduct

   The public interest in pursuing the misconduct

   The availability of evidence required to prove the misconduct

   The intent of the misconduct

   Where applicable, IFSCA may also consider the quantum of illegally-acquired profit made by the offender, as well as the loss caused to victims of the misconduct. Decisions to pursue enforcement actions are thoroughly reviewed to ensure that they are appropriate and fair.




3. IFSCA is empowered to conduct investigation/ inspections / examinations by the powers given under Section 13 (1) and (2) of the International Financial Services Centres Authority Act, 2019 ( herein referred to as IFSCA Act) read with respective Acts mentioned in Column 3 of Schedule I of IFSCA Act. Enforcement actions may be proposed against entities found to be violating provisions of respective Acts mentioned in the schedule with regards to IFSC. The enforcement actions may include the following:

   (i) Directions (Enforcement Nature)

   (ii) Warnings

   (ii) Monetary Penalty

   (iii) Suspension/ Cancellation of Registration

   (iv) Prosecution