IFSCA Proposes Model Portfolios for Research Entities in GIFT City

GIFT City Proposal Could Bring Curated Global Portfolios Into Research

The proposal would bring weighted baskets of securities within IFSCA’s research framework, with disclosures and monitoring built into their presentation.

A weighted basket would count as a research recommendation

The International Financial Services Centres Authority is seeking to expand the research products that can be offered in the International Financial Services Centre (IFSC) at GIFT City. Its consultation paper proposes clarifying that research recommendations under the Capital Market Intermediaries Regulations, 2025, include model portfolios: baskets of securities assigned specific weightages according to an investment theme or strategy.

That distinction matters because the current regulations permit research entities to publish or provide reports on securities, but do not currently allow model portfolios. Under the proposal, entities—including broker-dealers—would need to register as research entities to offer them. A consolidated list of securities would not automatically qualify: if a report assigns no weightages to the basket’s components, IFSCA says it would not, on that basis alone, be treated as a model portfolio.

The proposed definition therefore focuses not just on which securities appear in a report, but on how they are combined. Weightages can express the portfolio’s strategy and relative exposure, making the product different from a collection of individual recommendations.

Disclosure requirements would make the strategy more visible

Research reports would have to identify the portfolio’s geographical universe, asset classes, underlying themes, selection methodology and recommended investment horizon. They would also need to explain risks. These disclosures could help clients understand what a portfolio is designed to do, what it contains and how long the research entity envisages holding its positions.

The regulator also proposes a predefined schedule for updates and rebalancing. If a portfolio is changed outside that schedule, the entity would have to communicate the rationale to clients. That requirement could help make changes easier to track, while placing an operational responsibility on providers to explain why they have departed from the stated timetable.

Global exposure raises the importance of comparisons

IFSCA expects model portfolios in the IFSC to be largely global. The paper points to possible exposure across equities, fixed-income exchange-traded funds and commodity ETFs, among other asset classes. This range could allow research entities to frame strategies around different markets and instruments, although the proposal does not prescribe a specific portfolio mix.

For investors assessing such products, performance figures will be more useful when the comparison reflects the portfolio’s underlying strategy and asset universe. IFSCA has proposed consistent benchmarking against relevant indices. A benchmark can provide context, but it does not remove investment risk or guarantee that a portfolio will match or outperform it.

Consultation leaves the final framework open

The proposal follows industry representations seeking permission for model portfolios in GIFT-IFSC. IFSCA has invited stakeholder comments until November 30, so the requirements remain proposals rather than settled obligations. Feedback may inform how the regulator defines disclosures, portfolio changes and oversight before the framework is finalised.

The regulator proposes bringing compliance with the guidelines within the existing compliance audit framework. For research entities, that would make process and record-keeping part of the operating challenge alongside portfolio design. For investors, the practical value of the framework will depend on how clearly providers explain their methods and risks, and how consistently they follow their stated update schedules.

Key Highlights

• IFSCA proposes including weighted security baskets within research recommendations under the CMI Regulations, 2025.
• Entities, including broker-dealers, would need research-entity registration to offer model portfolios.
• Reports would disclose the investment universe, asset classes, themes, selection method, horizon and risks.
• Portfolios would follow a predefined rebalancing schedule, with explanations required for off-schedule changes.
• Performance claims would be compared consistently with relevant indices, with compliance covered by existing audits.
• Stakeholders can comment on the consultation proposal until November 30.

Investor Note: The proposal could widen the range of research products available in GIFT City, but it is not yet final. Investors evaluating any model portfolio should look beyond headline performance to its weightings, methodology, benchmark, risks and rebalancing policy.