The International Financial Services Centres Authority (IFSCA) introduced a regulatory framework for Distribution of Capital Market Products and Services under IFSCA (Capital Market Intermediaries) Regulations, 2021Â from international financial services centres (IFSCs).
- Currently, there is only one IFSC in India i.e. GIFT (Gujarat International Finance Tec) City in Gujarat.
- The Capital market products include securities as covered under Securities Contracts (Regulation) Act, 1956.
- The Capital market services include portfolio management services and investment advisory services.
Benefit:
With this, distributors of capital market products can register with the IFSCA, and undertake global distribution from these IFSCs and offer their services to clients in various jurisdictions.
Key Points:
i.In Gift City, distributors are permitted to enter into arrangements with other distributors (called associated distributors) from India, IFSC and foreign jurisdictions.
ii.In order to protect the interest of clients, the framework provides for various eligibility requirements, a detailed code of conduct including an advertisement code, other obligations, various permissible activities, responsibilities of issuers and service providers in IFSC, etc.
iii.The capital market services can be provided out of the IFSCs include portfolio management services and investment advisory services.
iv.Distributors such as banking units, finance companies, broker-dealers and those with a net worth more than $1,50,000 are permitted to invest in select countries where omnibus structure is allowed, subject to adequate measures.
v.A comprehensive code of conduct has also been prescribed to ensure distributors maintain high standards of integrity, and fairness in their dealings with clients.
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IFSCA and CEEW sign MoU to cooperate on sustainable finance
IFSCA and Council on Energy, Environment and Water (CEEW) have signed a Memorandum of Understanding (MoU) for mutual assistance and cooperation in the area of sustainable finance.
- This MoU will focus on broad areas of sustainable finance, and is a step towards achieving climate goals and mobilizing global capital.
Recent Related News:
i.IFSCA and the Reserve Bank of India (RBI) have signed a Memorandum of Understanding (MoU) to collaborate on regulation and supervision of regulated entities in their respective jurisdictions.
ii.The Gujarat International Finance Tec City (Gift City) signed a Memorandum of Understanding (MoU) with Fintech Association of Japan (FAJ) to promote innovation and entrepreneurship in the fintech domain.
About International Financial Services Centres Authority (IFSCA):
Chairperson– Injeti Srinivas
Headquarters– Gandhinagar, Gujarat
