The Ministry of Finance has issued a notification (S.O. 4493(E)) clarifying that Section 25 of the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013 will not apply to financial products, financial services, or financial institutions operating in an International Financial Services Centre (IFSC).
The order, issued by the Department of Economic Affairs (Financial Market Division) under the powers conferred by Section 31(1) read with Section 30 of the International Financial Services Centres Authority (IFSCA) Act, 2019, is aimed at strengthening the autonomy of IFSC entities and ensuring regulatory clarity for market participants.
Industry experts believe this move will streamline compliance requirements for pension and retirement-linked financial products offered in IFSCs such as GIFT City, Gandhinagar. By exempting IFSC entities from the applicability of Section 25 of the PFRDA Act, the government intends to promote innovation, attract global financial players, and enhance India's competitiveness in the international financial services ecosystem.
The decision aligns with the broader policy push to position IFSCs as global hubs for financial services, reduce regulatory overlaps, and create an enabling environment for cross-border pension and investment products.
This notification is expected to boost investor confidence and open new avenues for pension fund managers, financial institutions, and fintech companies operating in IFSC jurisdictions.
Official copy of the notification has been attached
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