Gift-City regulator, International Financial Services Centres Authority (IFSCA) proposes to enact a comprehensive regulatory framework for the capital markets’ intermediaries operating in the International Financial Services Centres (IFSCs) such as Gift-City in Gujarat.

The proposed regulations will focus on ensuring ease of doing business and put in place a framework consistent with the fundamental principles laid down by Iosco, which is the standard setting body for securities markets.

The IFSCA has now come out with a consultation paper on the proposed regulations for capital markets’ intermediaries and sought public comments by August 18, an official release said.

The proposed IFSCA regulations provide for regulatory requirements in respect to registration, obligations and responsibilities, inspection and enforcement of various types of capital market intermediaries such as broker dealers, clearing members, depository participants, investment bankers, portfolio managers, investment advisers, custodians, credit rating agencies, debenture trustees and account aggregators.

Further, the proposed intermediaries regulations envisage registered capital market intermediaries to undertake cross-border business in capital markets in India and foreign jurisdictions, subject to certain conditions such as ring fencing of operations, appropriate risk management and internal controls, maintenance of records etc.

Currently, the capital market intermediaries in IFSC are regulated by SEBI guidelines and other specific operating norms specified by the IFSCA and/or SEBI for stock brokers, portfolio managers, investment advisors and custodians.

The intermediaries play an important role by providing the intermediation facilities between their clients and the various regulated financial products and financial services in the IFSC. The intermediaries are also essential for building the ecosystem of capital markets in the IFSC.

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