M1NXT Explore the Role and Benefits of the International Financial Services Centres Authority

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2. Explore the Role and Benefits of the International Financial Services Centres Authority The International Financial Services Centres Authority (IFSCA) is a statutory authority established by the Government of India to develop and regulate international financial services centres in the country. The IFSCA was established in April 2020 under the International Financial Services Centres Authority Act, 2019. What is the International Financial Services Centres Authority? An International Financial Services Centre (IFSC) is a financial hub that serves customers located outside the jurisdiction of the domestic economy. Also referred to as an offshore financial centre, an IFSC facilitates the movement of finance, financial products, and services across international borders. The primary objective of the IFSCA is to foster a business-friendly environment within the IFSC and establish a global regulatory framework. The aim is to promote seamless business operations and ensure a top-notch regulatory environment for the benefit of all stakeholders. The Advantages of an International Financial Service Centre like IFSCA The advantages of an international financial service centre are that they attract investors from overseas by bringing financial services outside the jurisdiction of their domestic economy through financial institutions located overseas. International financial service centres are useful for global tax management, fundraising, and corporate treasury regulation.

3. The role of IFSCA The IFSCA plays a vital role in regulating the nature of business conducted within the IFSC and overseeing the operations of entities engaged in transactions within the IFSC. Its responsibilities extend to ensuring compliance and maintaining regulatory standards for all entities involved in conducting business activities within the IFSC. The possible benefits of an IFSC include integration or unification under one authority. This means that the banking, capital markets, and insurance sectors in IFSC that are regulated by various regulators, including the RBI, SEBI, and IRDAI, will be integrated or unified under the IFSC authority. What happens when businesses do not adhere to IFSCA norms? Not adhering to the IFSCA norms can result in missed opportunities for attracting overseas investors and benefiting from global tax management, fundraising, and corporate treasury regulation. When handling trade transactions, it is important to take care of compliance with regulations set forth by the IFSCA as well as other relevant authorities. The benefits of an international financial platform The benefits of an International Financial Platform include attracting overseas investors and providing a world-class regulatory environment for ease of doing business.

4. How does IFSCA help with the ease of doing business? The IFSCA has the primary objective of facilitating ease of doing business within the IFSC while establishing a world-class regulatory environment. As the business landscape in IFSCs is dynamic, the IFSCA serves as a unified regulator, ensuring effective coordination among various financial sector regulators. Its holistic vision aims to promote a seamless business environment and uphold global regulatory standards within the IFSC, benefiting all entities involved in transacting business within this jurisdiction. What are the other financial centres in India? The GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) is India’s first international financial services centre. Initially, the business activities within the IFSC were regulated by domestic financial regulators such as the RBI (Reserve Bank of India), SEBI (Securities and Exchange Board of India), PFRDA (Pension Fund Regulatory and Development Authority), and IRDAI (Insurance Regulatory and Development Authority of India). What is the difference between GIFT IFSC and other financial centres? An International Financial Services Centre (IFSC) is a financial hub that caters to customers located outside the jurisdiction of their domestic economy. It is commonly referred to as an offshore financial centre, as it facilitates the flow of finance, financial products, and services across international borders. The GIFT IFSC is India’s first international financial services centre.

5. The establishment of the IFSC at GIFT City marks a significant milestone in bringing financial service transactions related to India back to the country. It reinforces India’s strategic position as a global hub for financial services. In addition to providing a global financial platform, the IFSC offers convenient access to the Indian economy, which is one of the largest and fastest-growing economies in the world. Moreover, it serves as a bridge connecting the vast Indian diaspora of approximately 30 million people around the globe to India through the IFSC. What are the benefits of GIFT City’s IFSC over other financial centres in India? By establishing the IFSC at GIFT City, India reinforces its strategic standing as a global hub for financial services. Beyond offering a platform for global financial activities, the IFSC grants convenient access to the Indian economy, which ranks among the largest and fastest-growing in the world. Additionally, it serves as a vital link connecting the extensive Indian diaspora of approximately 30 million individuals worldwide to India through the IFSC. Things One Must Take Care of While Handling Trade Transactions Here are some pointers that one must take care of while handling trade transactions: • Ensure compliance with regulations set forth by relevant authorities. • Monitor and report daily P&L and risk positions.

6. Monitor lifecycle events and take appropriate action. • Maintain accurate and timely trade and break resolutions. • Be proactive in improving the flow of transactions. • Ensure that market risks are well under control. • Establish effective policies and procedures to ensure overall compliance, effective controls, and governance. What is the future of IFSCA? The IFSCA is a statutory authority established by the Government of India to develop and regulate international financial services centres in the country. The IFSCA has been taking several steps to promote the growth of IFSCs in India, including signing MoUs with other financial authorities, launching regulatory sandbox frameworks for testing innovative financial products, services, and business models, and holding roundtable conferences on the future of sustainable finance issuances in the IFSC. The future of IFSCA looks promising as it continues to take steps to promote the growth of IFSCs in India and provide a world-class regulatory environment for ease of doing business. More About Trade Transactions in India

7. Trade transactions in India encompass the export and import of goods and services. In May 2023, India’s overall exports, combining merchandise and services, are estimated to reach USD 60.29 billion. However, this reflects a negative growth rate of (-) 5.99% compared to May 2022. Merchanting trade transactions refer to the activities of Indian merchant traders who purchase goods from one country and sell them in another country without involving the physical territory of India. These transactions strictly adhere to the regulations specified in India’s Foreign Trade Policy (FTP), governing the permissible exports and imports of goods. Conclusion The International Financial Services Centres Authorityplays a crucial role in developing and regulating international financial services centres in India. Adhering to its regulations can provide numerous benefits for trade transactions and global financial management.

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