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Gift City expands global access providers, but foreign firms hold back
Gift City’s Global Access Providers rose to 18 by July, while investors using GAPs via India INX totaled 6,044 by March, with traded value up 11% year-on-year to $39 million.
Gift City, India’s first International Financial Services Centre, has been drawing more interest from domestic investors seeking access to overseas markets, as the number of Global Access Providers, or GAPs, climbed to 18 by July, from just a handful a year earlier, according to the International Financial Services Centres Authority.
The IFSCA data also showed that investors using GAPs through India International Exchange, or India INX, reached 6,044 by March, and total traded value rose 11% year-on-year to $39 million, as reflected in the IFSCA March quarter bulletin, highlighting momentum in volumes.
Still, attracting foreign financial firms and investors from major centers such as Hong Kong, Singapore, and Dubai remains a hurdle, with a Gift City official saying nearly 90% of investors trading through GAPs are Indians. Market participants attribute part of the challenge to stricter requirements tied to reporting every trade under the GAP framework.
Those GAP rules require intermediaries to follow KYC and anti-money laundering norms, disclose information to clients, segregate funds, monitor trading activity, and maintain transaction and trade data within the IFSC, LiveMint Markets reported. Sumit Chandra, founder and CEO of Jarvis Invest, said he considered setting up in Gift City but chose Dubai International Financial Centre, citing that transaction-level reporting in Gift City goes beyond the annual and quarterly compliance reporting he said jurisdictions such as DIFC and Singapore generally expect.