On August 28, 2025, the International Financial Services Centres Authority (“IFSCA” or “Authority”) released a consultation paper proposing amendments to the IFSCA (Performance Review Committee) Regulations, 2022 (“Proposed Regulations”).[1] These amendments are being introduced in accordance with the mandatory 3 (three) year review cycle stipulated under the IFSCA (Procedure for Making Regulations and Subsidiary Instructions) Regulations, 2025, and are aimed at enhancing the structure, independence, and ethical framework of the Performance Review Committee (“PRC”).
Stakeholders, including regulated entities, market participants, and members of the public, are invited to submit comments or suggestions on the proposed changes latest by September 17, 2025.
I. Background
Section 17 of the IFSCA Act, 2019 mandates the constitution of a PRC to review and assess the Authority’s functioning in the following areas:
- Whether the Authority has adhered to the provisions of the applicable laws while exercising its powers.
- Whether the regulations framed by the Authority promote transparency and adopt best governance practices.
- Whether the Authority is managing risks to its operations in a reasonable and prudent manner.
II. Key Proposed Amendments
- Constitution and Membership of the Committee
- Flexibility in Composition: Regulation 3(1)(i) of the Proposed Regulations is to be amended to replace the phrase “two members” with “at least two members”, thereby allowing flexibility in determining committee strength based on requirements.
- Deletion of Specific Role Reference: Regulation 3(1)(ii) of the Proposed Regulations is proposed to be amended by removing the words “for each review function”, to allow a more general and simplified interpretation of member responsibilities.
B. Eligibility Criteria for Independent Experts
A new proviso to Regulation 3(2) of the Proposed Regulations introduces objective disqualifications for independent experts to ensure integrity and independence. Individuals shall be ineligible for appointment if they:
- Have completed 75 (Seventy Five) years of age on the date of appointment;
- Have been adjudged as insolvent at any time;
- Have been convicted of an offence punishable with imprisonment of 180 (One Hundred and Eighty) days or more;
- Are mentally or physically incapacitated to discharge their duties;
- Have a material conflict of interest which cannot be resolved.
C. Resignation Protocol
A new sub-regulation (4) under Regulation 3 of the Proposed Regulations provides a formal mechanism for resignation, wherein, a member may resign by giving 6 (six) weeks’ written notice to the Board. The resignation becomes effective upon acceptance by the Board.
D. Introduction of Code of Conduct
A new Regulation 3A is suggested under the Proposed Regulations to introduce a mandatory Code of Conduct for all PRC members. Key provisions include:
- Mandatory Declaration: Each member shall sign a Declaration of Fidelity and Secrecy (as specified in the Schedule of the Proposed Regulations).
- Ethical Standards: Members shall act with integrity and uphold the dignity of office; disclose any conflict of interest and, where necessary, recuse themselves from proceedings; maintain strict confidentiality of information received during their tenure; and uphold high standards of public probity and impartiality.
E. Revisions to Meeting Procedures
- Meeting Frequency and Quorum: The frequency of committee meetings under Regulation 8(1) of the Proposed Regulations is proposed to be revised from “twice a year” to “once annually”, unless otherwise required. Regulation 8(2) of the Proposed Regulations shall be replaced to mandate a quorum comprising at least 50% (Fifty Percent) of the total committee strength, including: (i) At least 1 (one) member from the Authority; and (ii) At least 1 (one) independent expert.
- Decision-Making Process: A new Regulation 8(2A) provides that each member shall have 1 (one) vote; in the event of a tie, the Chairperson shall have a casting vote.
F. Editorial and Technical Amendments
The following textual and structural changes are proposed for clarity and consistency:
- Regulation 9 of the Proposed Regulations: Clause identifiers “(a)” to “(e)” will be renumbered as “(1)” to “(5)” respectively.
- Regulation 10(1) of the Proposed Regulations: Deletion of the phrase “containing the findings of each review area” to allow for flexibility in reporting format.
- Regulation 10(2) of the Proposed Regulations: Substitution of “section 17(2)” with “sub-section (2) of section 17” for improved statutory alignment.
G. Schedule: Declaration of Fidelity and Secrecy
A new Schedule is proposed to be added at the end of the principal regulations, prescribing the Declaration of Fidelity and Secrecy to be signed by all committee members at the time of appointment. This formalizes their commitment to confidentiality and ethical conduct.
H. Submission of Comments
Stakeholders are encouraged to submit their feedback in MS Word or MS Excel format only, using the format provided in the consultation paper. Comments to be emailed to: ‘sreekara.rao@ifsca.gov.in’ and CC: ‘eshan.jaipuriar@govcontractor.in’ latest by 17 September 2025.
[1]https://ifsca.gov.in/CommonDirect/GetFileView?id=21626bde60601ef44a0ed02201954a95&fileName=Consultation_paper_on_draft_IFSCA__Performance_Review_Committee___Amendment__Regulations__2025_20250828_0218.pdf