Executive Summary:
This document outlines regulations for financial institutions established in International Financial Services Centres (IFSC) in India. It defines key terms, specifies the treatment of IFSC financial institutions as non-residents, and details the scope of permissible business activities. These regulations came into force on the date of their publication in the Official Gazette: March 23, 2015.
Key Points / Main Content:
* **Title and Commencement:**
* These regulations are called the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015.
* They came into force on the date of their publication in the Official Gazette.
* **Definitions:**
* Act: Refers to the Foreign Exchange Management Act, 1999.
* Financial Institution: Includes companies, firms, associations of persons, bodies of individuals, and artificial juridical persons engaged in rendering financial services or carrying out financial transactions; also includes banks, non-banking financial companies, insurance companies, etc.
* Financial Service: Activities a financial institution is allowed to conduct as specified by the Parliament, the Government of India, or any Regulatory Authority.
* Financial Transaction: Payments to or from a person, issuing financial instruments, transferring securities, or acknowledging debt.
* FMC: The Forward Market Commission established under the Forward Contracts Regulation Act, 1952.
* IFSC: International Financial Services Centre, as defined in Section 2(q) of the Special Economic Zones Act, 2005.
* IRDA: The Insurance Regulatory and Development Authority established under the Insurance Regulatory and Development Authority Act, 1999.
* PFRDA: The Pension Fund Regulatory and Development Authority established under the Pension Fund Regulatory and Development Authority Act, 2013.
* Regulatory Authority: Includes RBI, SEBI, IRDA, PFRDA, FMC, or any statutory authority regulating a financial institution.
* SEBI: The Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992.
* **Operational Guidelines:**
* A financial institution or branch in an IFSC, recognized by the Government of India or a Regulatory Authority, is treated as a person resident outside India.
* These institutions can conduct business in foreign currency and with residents or non-residents as determined by the relevant Regulatory Authority.
* Unless otherwise specified, other regulations do not apply to financial institutions in an IFSC, subject to Section 13 of the Act and directives from the Reserve Bank of India.
Impact Analysis:
Financial Institutions in IFSC:
* Impact: Must comply with these regulations to operate in the IFSC. They are treated as non-residents for foreign exchange management purposes.
* Action Required: Understand and adhere to the regulations regarding permissible business activities and foreign currency transactions.
Regulatory Authorities (RBI, SEBI, IRDA, PFRDA, FMC):
* Impact: These authorities oversee and regulate financial institutions within the IFSC.
* Action Required: Enforce these regulations and issue specific guidelines and approvals as necessary.
Reserve Bank of India (RBI):
* Impact: Retains the power to issue directions and clarifications related to these regulations.
* Action Required: Provide guidance and interpretations of the regulations as needed.
Key Entities Referenced
Foreign Exchange Management Act, 1999: The Act under which the regulations are made, as stated in the document.
International Financial Services Centre: A key entity to which these regulations apply, abbreviated as IFSC.
Foreign Exchange Management International Financial Services Centre Regulations, 2015: The full title of the regulations being promulgated.
Reserve Bank of India: The central bank of India, which is issuing the regulations and is a key Regulatory Authority.
Special Economic Zones Act, 2005: Act that defines the meaning of International Financial Services Centre (IFSC).
Securities and Exchange Board of India: A Regulatory Authority that regulates financial institutions.
Insurance Regulatory and Development Authority: A Regulatory Authority that regulates insurance companies, mentioned as IRDA.
Pension Fund Regulatory and Development Authority: A Regulatory Authority responsible for regulating pension funds, mentioned as PFRDA.
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बनाता ह ै; अथा(cid:4)त ्:—
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i. ये िविनयम िवदेशी मु(cid:13)ा (cid:14)बंध (अंतररा%ीय िव(cid:25)ीय सेवाएं क((cid:13)) िविनयमावली, 2015 कहलाएगं े ।
ii. वे सरकारी राजप1 म ( उनके (cid:14)काशन क(cid:22) तारीख स े लागू ह(cid:27)गे ।
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इस िविनयमावली म( जब तक 8क (cid:14)संग से अ9यथा अपेि:त न हो -
(ए) ‘अिधिनयम’ का अथ (cid:4) िवदेशी म(cid:13)ु ा (cid:14)बंध अिधिनयम, 1999 (1999 का 42) होगा ;
(बी) ‘िव(cid:25)ीय सं)था’ म( िन. निलिखत शािमल ह(cid:27)ग;े
(i) कोई कंपनी, अथवा
(ii) कोई फ़म,(cid:4) अथवा
1351 GI/2015 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(iii) लोग(cid:27) का कोई एसोिशएशन (AOP) अथवा =ि(cid:26)य(cid:27) का कोई िनकाय (BOI), चाह े िनगिमत हो
अथवा नह>, अथवा
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अथवा िव(cid:25)ीय लने देन करन े म( संलF हो ।
####पपपप$$$$ीीीीककककररररणणणण:::: इस उप-िविनयम के (cid:14)योजन के िलए, और उपयु(cid:4)(cid:26) सामा9यता को :ित प(cid:31)चं ाए िबना, “िव(cid:25)ीय सं)था”
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अ9य सं)था शािमल होगी।
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वायदा बाजार आयोग से ह।ै
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(cid:14)ािधकरण (PFRDA), वायदा बाजार आयोग (एफ़एमसी) अथवा भारतीय कानून के अंतगत(cid:4) 8कसी
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)थािपत भारतीय (cid:14)ितभूित और िविनमय बोड(cid:4) से ह।ै
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माना जाएगा ।
4. कोई िव(cid:25)ीय सं)था अथवा िव(cid:25)ीय सं)था क(cid:22) शाखा 8कसी ऐसी िवदेशी मु(cid:13)ा म ( और 8कसी िनवासी अथवा
अिनवासी =ि(cid:26) अथवा अ9य के साथ संबि9धत िविनयामक (cid:14)ािधकारी (cid:24)ारा 8कए गए िनधा(cid:4)रणानुसार कारोबार कर
सकती ह ै ।¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 3
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अथवा समय----समय पर "रज़व(cid:4) ब$क (cid:24)ारा 8दये गए िनदेश(cid:27) म ( उपबंिधत अ9य छूट के िसवाय 8कसी अ9य िविनयमावली म (
अंतEवQ शत\ अंतररा%ीय िव(cid:25)ीय सेवा क((cid:13) म( )थािपत 8कसी ऐसी िव(cid:25)ीय सं)था अथवा िव(cid:25)ीय सं)था क(cid:22) शाखा पर लागू नह>
ह(cid:27)गी ।
[सं. फेमा/339/2015-आरबी]
बी. पी. कानूनगो,,,, (cid:14)धान मु]य महा(cid:14)ब9धक
RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)
NOTIFICATION
Mumbai, the 2nd March, 2015
Foreign Exchange Management (International Financial Services Centre) Regulations, 2015
G.S.R. 218(E).—In exercise of the powers conferred by section 47 of the Foreign Exchange
Management Act, 1999 (42 of 1999), the Reserve Bank makes the following regulations relating to financial
institutions set up in International Financial Services Centres, namely:-
1. Short title and commencement:-
i. These regulations may be called the Foreign Exchange Management (International Financial
Services Centre) Regulations, 2015.
ii. They shall come into force from the date of their publication in the Official Gazette.
2. Definitions:-
In these Regulations unless the context requires otherwise Ñ
(a) ‘Act’ shall mean the Foreign Exchange Management Act, 1999 (42 of 1999);
(b) ‘Financial Institution’ shall include
(i) a company, or
(ii) a firm, or
(iii) an association of persons or a body of individuals, whether incorporated or not, or
(iv) any artificial juridical person, not falling within any of the preceding categories
engaged in rendering financial services or carrying out financial transactions.
Explanation: For the purpose of this sub-regulation, and without any loss of generality of the above, the
expression ‘financial institution’ shall include banks, non-banking financial companies, insurance companies,
brokerage firms, merchant banks, investment banks, pension funds, mutual funds, trusts, exchanges, clearing
houses, and any other entity that may be specified by the Government of India or a Financial Regulatory
Authority.
(c) ‘Financial service’ shall mean activities a financial institution is allowed to carry out as
specified in the respective Act of the Parliament or by the Government of India or by any
Regulatory Authority empowered to regulate the concerned financial institution.
(d) ‘Financial transaction’ shall mean making any payment to, or for the credit of any person, or
receiving any payment for, by order or on behalf of any person, or drawing, issuing or
negotiating any bill of exchange or promissory note, or transferring any security or
acknowledging any debt.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(e) ‘FMC’ shall mean the Forward Market Commission established under the Forward Contracts
(Regulation) Act, 1952 (74 of 1952).
(f) ‘International Financial Services Centre’ or ‘IFSC’ shall have the same meaning given in
Section 2 (q) of the Special Economic Zones Act, 2005 (28 of 2005).
(g) ‘IRDA’ shall mean mean the Insurance Regulatory and Development Authority established
under the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).
(h) ‘PFRDA’ shall mean the Pension Fund Regulatory and Development Authority established
under the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013).
(i) ‘Regulatory Authority’ shall include Reserve Bank of India (RBI), Securities Exchange Board
of India (SEBI), Insurance Regulatory Development Authority (IRDA), Pension Fund
Regulatory and Development Authority (PFRDA_, Forward Market Commission (FMC) or any
other statutory authority empowered to regulate a financial institution under the Indian laws.
(j) 'SEBI' shall mean the Securities and Exchange Board of India established under the Securities
and Exchange Board of India Act, 1992 (15 of 1992).
(k) The words and expressions used but not specified in these Regulations shall have the same
meanings respectively assigned to them in the Act.
3. Any financial institution or branch of a financial institution set up in the IFSC and
permitted/recognised as such by the Government of India or a Regulatory Authority shall be treated as a
person resident outside India.
4. A financial institution or branch of a financial institution shall conduct such business in such
foreign currency and with such persons, whether resident or otherwise, as the concerned Regulatory Authority
may determine.
5. Subject to the provisions of Section 1(3) of the Act, and save as otherwise provided in these
Regulations or any other Regulations or directed by the Reserve Bank of India from time to time, nothing
contained in any other regulations shall apply to a financial institution or branch of a financial institution set
up in an IFSC.
[No. FEMA/339/2015-RB]
B. P. KANUNGO, Principal Chief General Manager
Printed by the Manager, Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.