SEBI (INTERNATIONAL FINANCIAL SERVICES CENTRES) GUIDELINES, 2015 - AMENDMENT

SEBI (INTERNATIONAL FINANCIAL SERVICES CENTRES) GUIDELINES, 2015 - AMENDMENT

Securities and Exchange Board of India amends eligibility criteria and the shareholding limit for clearing corporation at IFSC.

The Securities and Exchange Board of India (SEBI) on Friday, the 7th August 2020 has amended the International Financial Services Centre (IFSC) guidelines, 2015 relating to the eligibility criteria and the shareholding limit for those clearing corporations that wish to operate in such center’s.
 

In order to provide smooth and efficient operation at international financial services center (IFSC) and after the due consultation with the stakeholders, SEBI decided to amend the clause 4 (2) of SEBI (IFSC) Guidelines, 2015



 

New amended guideline

  • As per the new guidelines, any recognized Indian stock exchange or, any recognized stock exchange or clearing corporation of a foreign jurisdiction, are required to form a subsidiary in order to provide the services of a clearing corporation in IFSC in which minimum fifty-one percent (51%) of the paid-up equity share capital is held by such exchange or clearing corporation.
     
  • The remaining share capital can be acquired or possessed by any other person either Indian or foreign jurisdiction. But there are certain conditions imposed on the remaining balance of share capital and the condition is that such a person not at any point of time will acquire or hold more than five percent (5%) of the paid-up equity share capital in a clearing corporation in IFSC, subject to applicable laws.
     
  • As per the new norms any other stock exchange, a depository, a bank company, an insurance company and a clearing corporation falling under the Indian jurisdiction or of foreign jurisdiction have been permitted to acquire fifteen percent (15%) of the paid-up equity share capital in such clearing corporation operating in an IFSC.
     
  • Apart from the above, public financial institutions of Indian jurisdiction, foreign commodity derivatives exchange, and central government approved bilateral or multilateral financial institutions can acquire or possess, either directly or indirectly, either individually or jointly, up to fifteen percent (15%) of the paid-up equity share capital in such clearing corporation with prior approval of the board.
     

It is important to note that, India’s only International financial services center (IFSC) is in Gujarat International Finance Tec-City (GIFT) city which is near Ahmedabad in the state of Gujarat.

This circular is issued to protect the interests of investors in securities and to promote the development of,  and to regulate the securities market. 

For any further information, kindly click on the below-given link -

https://www.sebi.gov.in/legal/circulars/aug-2020/sebi-international-financial-services-centres-guidelines-2015-amendment_47281.html


Edited by Minu Mishra

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