The legal basis
IFSCA states that its powers of investigation, inspection and examination come from section 13(1) and (2) of the IFSCA Act, read with the Acts in column 3 of the First Schedule. In the IFSC, IFSCA exercises the powers of the RBI, SEBI, IRDAI and PFRDA under their own statutes, and enforcement can be proposed for breaches of those Acts as they apply in the IFSC. Its orders follow this pattern: a fund-management order of July 2026, for example, was passed under sections 12 and 13(4) of the IFSCA Act read with sections 11B and 15A, 15B and 15EA of the SEBI Act, 1992 and the Fund Management Regulations.
IFSCA lists the actions available as directions, warnings, monetary penalties, suspension or cancellation of registration, and prosecution. Before opening a formal investigation, it weighs the seriousness of the misconduct (including harm or loss), the public interest, the evidence and intent, and, where relevant, any illegal gain and loss to victims.
Inspections
Each framework sets out inspection powers. Under the Fund Management Regulations, 2025, for example:
- IFSCA may inspect on its own motion or after a complaint, covering books, records, infrastructure, systems and procedures (regulation 138). Notice is normally given, but may be dispensed with in the investors' interest.
- The entity and every principal officer, director, KMP, employee and agent must co-operate, produce records and give access to premises (regulation 139).
- IFSCA may appoint an auditor or valuer at the entity's cost (regulation 140).
- After considering the report and hearing the entity, IFSCA may issue directions, such as barring new schemes, ordering refunds or restricting market access (regulation 142).
Supervision also happens through surprise visits. In the order described below, IFSCA's market-intelligence visits to fund managers' GIFT City offices checked whether staff were physically present.
From notice to order: two published examples
Physical presence of KMPs (order of 2 May 2025). IFSCA's surprise visits on four dates between July and October 2024 found an FME branch's office closed and its Principal Officer and KMPs absent, contrary to regulations 7(4) and 10(1) of the Fund Management Regulations, 2022. An advisory letter went unanswered, and a show-cause notice and hearing followed. Because the branch had since taken corrective steps (full attendance of KMPs, recruitment, IT equipment), IFSCA treated cancellation or a penalty as disproportionate. It issued a warning that any repetition would lead to stringent action.
Penalties and directions (order of 31 July 2026). After reviewing a registered FME's SEZ commencement intimation and its explanations, IFSCA issued a show-cause notice on 28 April 2026. The entity replied on 9 June 2026 and was heard by IFSCA's Quasi-Judicial Authority for Enforcement on 8 July 2026. The order imposed three penalties of INR 1,00,000 each under sections 15A, 15B and 15EA of the SEBI Act, payable within 45 days with 12 per cent simple interest after that. Under section 13(5) of the IFSCA Act, the penalty is deposited in the foreign-currency equivalent at the RBI rate on the date of the order. The order also gave directions to publish a disclosure document and obtain client consent for derivatives within 45 days. It noted that an appeal lies to the Securities Appellate Tribunal under section 15T of the SEBI Act read with section 13(4) of the IFSCA Act.
What IFSCA publishes
IFSCA's Enforcement Actions page lists its orders by date, entity and category of action: advisories, cautions, warnings, directions, penalties, interim and confirmatory orders, and cancellations of registration. The orders listed so far involve fund managers, broker-dealers, insurance brokers, lessors, finance units and fintech entities. IFSCA also publishes notices it could not serve, and the orders that followed. An entity's registered address and contact email therefore need to stay current. For a digest of orders, see IFSCA orders.
If you receive a notice
- Diarise the reply date and ask for any documents relied on that were not supplied. In the July 2026 order, the documents relied on were served with the notice.
- Answer every allegation with documents: attendance and access records, board minutes, filings and correspondence.
- Show remediation. The May 2025 order shows that IFSCA weighs corrective action in deciding whether a penalty or cancellation is proportionate.
- Attend the personal hearing, and put any post-hearing submissions in writing.
- Preserve appeal rights from the day the order is received, and check which appellate forum applies to the framework. See Challenging regulatory action.
A request under the Informal Guidance Scheme is not a way round a live matter: under paragraph 8 of the Scheme, IFSCA will not entertain questions under investigation or enforcement.