The Finance Ministry has issued a notification establishing the International Financial Services Centres Authority (IFSCA) to unify supervision over all financial services in international financial services centres (IFSCs) in the country.
IFSCA will be headquartered in Gandhinagar in Gujarat, as per the notification, according to a report by The Economic Times.
Currently, the banking, capital markets and insurance sectors in an IFSC are regulated by multiple regulators such as Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and IRDAI.
The notification brings into effect certain provisions of the IFSCA Act, 2019. The central government has refrained from fully enabling the new authority with all its powers as envisaged in the Act.
While allowing for the appointment of IFSCA members and other employees, setting up of funds and exemption from taxes, the government has not effected fully provisions for IFSCA pertaining to the regulation of financial products, financial services and financial institutions and its abilities to transact in foreign currencies and make rules.
This means that the main function of the IFSCA will be to regulate financial products such as securities, deposits or contracts of insurance, financial services, and financial institutions that have been approved by the relevant regulator for the particular financial services sector.
The IFSCA board will comprise a chairperson, and one member each nominated by the regulators, SEBI, RBI, IRDAI and the The Pension Fund Regulatory and Development Authority. There will also be two members from the central government and full-time or part-time members.