Foreign Exchange Management (International Financial Services Centre) Regulations, 2015

Pur­suant to announce­ment in the Union Bud­get 2015–2016 on Gujarat Inter­na­tion­al Finance Tec-City (GIFT), SEBI Board has approved SEBI (Inter­na­tion­al Finan­cial Ser­vices Cen­tres) Guide­lines, 2015. These guide­lines facil­i­tate and reg­u­late finan­cial ser­vices relat­ing to secu­ri­ties mar­ket in an Inter­na­tion­al Finan­cial Ser­vices Cen­tre (IFSC) set up under Sec­tion 18(1) of Spe­cial Eco­nom­ic Zones Act, 2005 and mat­ters con­nect­ed there­with or inci­den­tal there­to. The broad frame­work of secu­ri­ties laws has been made applic­a­ble to the enti­ties oper­at­ing in IFSC with cer­tain carve outs as spec­i­fied in the guidelines.

(ii) Indi­an as well as for­eign stock exchanges, clear­ing cor­po­ra­tions and depos­i­to­ries are per­mit­ted to set up sub­sidiaries to under­take the same busi­ness in IFSC sub­ject to cer­tain relaxed norms on share­hold­ing and net worth, etc. In addi­tion, stock exchanges are also per­mit­ted to set up clear­ing cor­po­ra­tions in IFSC. All Insti­tu­tions in IFSC will com­ply with the IOSCO prin­ci­ples and Prin­ci­ples for Finan­cial Mar­ket Infra­struc­tures (FMIs) and such oth­er gov­er­nance norms spec­i­fied by SEBI. SEBI reg­is­tered inter­me­di­aries or rec­og­nized inter­me­di­aries of for­eign page: 1 [ www.sebi.gov.in ] juris­dic­tion are per­mit­ted to oper­ate as secu­ri­ties mar­ket inter­me­di­aries in IFSC through a sub­sidiary or joint ven­ture company.

(iii) The guide­lines, inter alia, per­mits issue of depos­i­to­ry receipts and debt secu­ri­ties in IFSC by domes­tic as well as for­eign com­pa­nies sub­ject to the For­eign Cur­ren­cy Depos­i­to­ry Receipts Scheme, 2014 and rel­e­vant SEBI ( Issue of Cap­i­tal and Dis­clo­sure Require­ment) Reg­u­la­tions. The guide­lines also pro­vide for list­ing and trad­ing of equi­ty shares issued by com­pa­nies incor­po­rat­ed out­side India, depos­i­to­ry receipts, debt secu­ri­ties, cur­ren­cy and inter­est rate deriv­a­tives, index based deriv­a­tives and such oth­er secu­ri­ties as may be spec­i­fied by SEBI from time to time. Non Res­i­dent Indi­an, for­eign investors, insti­tu­tion­al investors, and Res­i­dent Indi­an eli­gi­ble under FEMA may par­tic­i­pate in IFSC.

(iv) Mutu­al Funds and Alter­na­tive Invest­ment Funds set up in IFSC can invest in secu­ri­ties list­ed in IFSC, secu­ri­ties issued by com­pa­nies incor­po­rat­ed in IFSC and secu­ri­ties issued by for­eign issuers.

(v) SEBI will be spec­i­fy­ing norms and relax­ations by way of guid­ance notes or cir­cu­lars, for imple­men­ta­tion of these guide­lines to facil­i­tate and reg­u­late finan­cial ser­vices relat­ing to secu­ri­ties mar­ket in an IFSC.