Top policymakers in the financial services arena will meet on June 24 to discuss and firm up the second level of regulations for setting up international financial service centres (IFSCs) in the country.

The Finance Minister, Arun Jaitley, had in April this year unveiled — at Gandhinagar in Gujarat — the first set of regulations for finance special economic zones (SEZs).

This had paved the way for the Gujarat International Finance Tec-City (GIFT) — the first finance SEZ — to commence operations.

Although several regulatory relaxations have already been announced by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) to enable finance SEZs to take off and gain popularity, the Centre has so far not announced any tax sops.

Tax sops

Indications are that the issue of ‘tax sops’ will come up for discussion at the meeting slated in Mumbai on June 24. Besides the regulators, representatives of stock exchanges — NSE and BSE – and Clearing Corporation of India will also be present at the meeting, sources said.

The existing IFSC regulatory framework allows both Indian and foreign stock exchanges to set up separate bourses within such centres through the subsidiary route.

Even other market entities, including asset management companies and depositories, have been allowed to set up shop in such centres.

Indian regulatory authorities have already relaxed the capital requirements to enable stock exchanges, depositories and other intermediaries to set up shop in the ‘Finance SEZs’ that may come up in the country.

The main objective of the IFSC framework is to enable India get back much of the financial services business it had lost out to international financial service centres in Singapore and Dubai in the area of currency and derivatives trading.

Srivats.kr@thehindu.co.in

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