Listing Debt Securities and ESG-Labelled Bonds on IFSC Exchanges

The debt listing regime in GIFT IFSC is deliberately light at the front end and specific at the edges. An issuer files with the exchange rather than with the regulator, disclosure content is largely prescribed by a checklist, and the exchange has power to exempt. The rigour appears in two places: credit rating, where a domestic requirement now bites, and ESG labelling, where the regulations impose standards, external review and continuing disclosure.

The Basic Debt Listing Route

Under regulation 68 of the IFSCA (Listing) Regulations, 2024, an issuer may list debt securities on a recognised stock exchange in the IFSC, either as a standalone issuance or through a series of issuances, including a medium term note programme.

The mechanics are exchange-led. The issuer files a listing application with the exchange, together with the offer document or information memorandum, in accordance with the exchange’s requirements, and pays the regulatory fee, which the exchange remits to IFSCA. Where the issuance is in a series, the exchange may grant approval for listing and trading of such issuance, and pricing supplements must be submitted to the exchange before admission to listing.

What Must be Disclosed

Regulation 70 requires the offer document or information memorandum to contain all material disclosures that are true, correct and adequate for an informed investment decision, and then specifies two sets of content.

Issuer disclosures: general information; risk factors; information about the issuer; business description; organisational structure; management; major or controlling shareholders; audited financial statements; statutory auditor; and material outstanding litigation and defaults.

Issue disclosures: details of the debt securities; risk factors; the list of exchanges where the securities are listed or proposed to be listed; the maximum amount of issuance in the case of an MTN programme or tranche issuance; and use of proceeds.

The exchange may require further information. Where the securities are backed by security or collateral, the relevant details must be adequately disclosed.

Exemptions. Regulation 70(7) permits the exchange, on application and if satisfied, to exempt an issuer from certain disclosures, provided the exchange has an internal policy or guidelines for granting such exemptions. This is a genuine flexibility, but it is exercised by the exchange under a published policy rather than at large.

For private placements, the minimum subscription amount per investor must be disclosed in the offer document rather than prescribed by regulation.

Credit Rating: The 2025 Change

Regulation 72 originally allowed an issuer to obtain a credit rating from an agency registered either with IFSCA or with a regulator in a foreign jurisdiction. A proviso changed that: from 1 April 2025, or such other date as IFSCA specifies, the issuer must obtain a credit rating from at least one credit rating agency registered with IFSCA, and may obtain additional ratings from globally recognised agencies registered with a foreign regulator.

The practical effect is to require an IFSC-registered rating in every listed debt issuance, with international ratings layered on top. Issuers planning a programme should confirm the registration status of their rating agency before filing.

Public Issues and Exempt Issuers

For a public issue of debt securities, the issuer must comply with additional requirements such as appointment of a trustee and creation of a debenture redemption reserve, together with such other requirements as IFSCA or the exchange specifies.

Regulation 74 permits the exchange, on application and in accordance with its internal policy, to relax certain requirements of the debt chapter or the ESG chapter for three categories of issuer: supranational, multilateral or statutory institutions, organisations or agencies; entities whose securities are irrevocably guaranteed by a sovereign; and any other entity IFSCA specifies. This is the accommodation that makes IFSC listings practical for development finance institutions and sovereign-backed issuers.

ESG-Labelled Debt Securities

Chapter X applies to ESG-labelled debt securities, including green, social, sustainability and sustainability-linked securities, and any other ESG label IFSCA specifies, that are listed or proposed to be listed. Its requirements are additional to Chapter IX.

Recognised standards. Securities may be labelled green, social or sustainability only if the proceeds are proposed to be used for financing or refinancing projects or assets aligned with one of the recognised standards: ICMA principles or guidelines; the Climate Bonds Standard; ASEAN standards; European Union standards; any framework or methodology specified by a competent authority or financial sector regulator in India; or other international standards permitted by IFSCA case by case. Sustainability-linked securities must be aligned with one of those standards or other qualifying criteria specified by IFSCA.

Independent external review. The issuer must appoint an independent external reviewer to ascertain alignment with a recognised standard. The reviewer must be independent of the issuer, its directors, senior management, key managerial personnel and advisers; be remunerated in a way that prevents conflicts of interest; and have sufficient expertise in assessing ESG debt securities. The review may take one or more of the forms recommended by ICMA: second party opinion, verification, certification, or scoring or rating. A credit rating agency or ESG rating provider registered with IFSCA or with a regulator in India or a foreign jurisdiction may act as external reviewer, subject to the same independence conditions. Details of the reviewer must be adequately disclosed and easily accessible to investors.

This dovetails with the capital markets intermediary framework, under which an ESG Ratings and Data Products Provider registered with IFSCA may provide independent external review for ESG-labelled bonds listed on IFSC exchanges (Article 25).

Additional disclosures. For ESG-labelled securities other than sustainability-linked ones, the offer document must state the ESG objectives of the issue, the process for evaluating and selecting projects or assets, the proposed use of proceeds including project and asset details, and the systems and procedures for tracking deployment of proceeds.

For sustainability-linked securities, the issuer must disclose the rationale for the issuance and its consistency with the issuer’s overall sustainability and business strategy, and must adhere to pre-issuance and post-issuance obligations under the relevant international standard. The regulation gives the example of the ICMA Sustainability-Linked Bond Principles (2024), whose five core components are selection of key performance indicators, calibration of sustainability performance targets, bond characteristics, reporting and verification.

Continuing obligations. Chapter X imposes additional continuous disclosure requirements beyond the general listing obligations, which sit in Chapter XII of the regulations alongside compliance officer obligations, price-sensitive information, financial statements, corporate governance and sustainability reporting.

Practical Sequencing for an Issuer

1. Decide the format early: standalone issuance or MTN programme, private placement or public issue, and whether an ESG label will be used.
2. Engage an IFSCA-registered rating agency, since at least one such rating is required.
3. For an ESG label, select the standard first, then appoint the external reviewer against the independence and expertise conditions, and build the use-of-proceeds tracking systems before issuance, not after.
4. Test whether the exempt-issuer route applies where the issuer is supranational or sovereign-guaranteed.
5. Plan for continuing disclosure, including the ESG-specific reporting that follows the label through the life of the bond.