On July 28, 2021, IFSCA has sought public comments on the proposed International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021. The objective of the Regulations is to enact a comprehensive regulatory framework for the intermediaries in the capital markets operating in IFSC focusing on ease of doing business and consistent with the fundamental principles laid down by IOSCO.
Salient features of the proposed Intermediaries Regulations are as follows:
A. Registration Requirements
- It shall be mandatory for broker dealers, clearing members, depository participants, investment bankers, portfolio managers, investment advisers and custodians to obtain registration from IFSCA prior to providing any financial products or financial services in the IFSC. Additionally, the credit rating agencies, debenture trustees and account aggregators may register with the IFSCA and shall comply with all the applicable requirements specified in the Intermediaries Regulations.
- The banking units recognised by the IFSCA shall be permitted to function as bankers to an issue in the capital markets in IFSC, without any additional registration requirement, subject to compliance with the regulatory provisions that may be specified by the IFSCA from time to time.
B. Registration Requirements
- The IFSCA shall consider the following factors for registration of capital market intermediaries:
(a) past experience;
(b) necessary infrastructure;
(c) compliance with eligibility criteria, net worth and applicable fund allocation requirements; and
(d) compliance with fit and proper requirements by the applicant and its directors, key managerial personnel and controlling shareholders.
C. General obligations and responsibilities
The registered capital market intermediaries shall be required to comply with the general obligations and responsibilities specified in the Intermediaries Regulations including, –
(a) code of conduct;
(b) maintenance of books of account, records and other documents in electronic retrieval form for minimum of 20 years;
(c) submission of information and furnishing of returns and statements to the IFSCA;
(d) redressal of investor grievances;
(e) maintaining a business continuity plan;
(f) cyber security and cyber resilience;
(g) risk management and internal controls; and
(h) annual audit.
The consultation paper is available HERE .
Comments and suggestions from public are invited on the proposed Intermediaries Regulations by August 18, 2021.
