In the notification number IFSCA202223GN023 dated the 12th April,

## Report on IFSCA Corrigendum Regarding Financial Product Definition **1. Executive Summary:** This report analyzes a corrigendum issued by the International Financial Services Centres Authority (IFSCA) regarding the definition of a financial product. The corrigendum, published on April 29, 2022, amends notification number IFSCA202223GN023, originally dated April 12, 2022, clarifying the definition of a financial product to specifically include operating leases (including hybrids with financial leases) related to certain equipment. This change likely aims to provide greater clarity and regulatory certainty surrounding operating leases within International Financial Services Centres (IFSCs). **2. Introduction:** The purpose of this report is to provide an overview and analysis of a corrigendum issued by the International Financial Services Centres Authority (IFSCA), based solely on the information provided in the official gazette notification. This report aims to inform stakeholders about the changes introduced and their potential implications. **3. Policy Overview:** * This document is a **corrigendum** to notification number IFSCA202223GN023 dated April 12, 2022. * **Core Objective (inferred):** To clarify and refine the definition of a "financial product" within the regulatory framework of the IFSCA. **4. Background and Rationale:** * **Reason for Amendment:** The amendment addresses a lack of specificity in the original definition of a "financial product" under clause (d) of subsection (1) of section 3 of the relevant Act. By explicitly including "operating leases, including a hybrid of operating and financial lease, in respect of the following equipment," the corrigendum narrows the scope and provides greater clarity for regulated entities. The initial vagueness likely led to uncertainty regarding whether operating leases qualified as financial products, prompting this clarifying amendment. **5. Key Provisions / Changes:** * **Specific Part of Original Policy Changed:** The first paragraph of notification number IFSCA202223GN023, dated April 12, 2022, which defines the meaning of "financial product". * **New Rule/Provision:** The original wording "specifies the following as a financial product under clause d of subsection 1 of section 3 of the said Act in the first paragraph" is replaced with "specifies an operating lease, including an hybrid of operating and financial lease, in respect of the following equipment, as financial product:". * **Difference/Effect of Change:** The amendment narrows the scope of the definition, explicitly including operating leases and hybrid operating/financial leases for specific equipment as financial products. This means that these types of leases will now be subject to regulations applicable to financial products within IFSCs. The original broad wording is replaced by a specific and precise definition. It changes the applicability and regulatory oversight of operating leases. **6. Target Audience and Stakeholders:** Based on the text, the target audience includes: * Entities operating within International Financial Services Centres (IFSCs). * Organizations involved in leasing activities, specifically operating leases and hybrid leases. * Businesses that use leasing as a mechanism for acquiring equipment. **7. Implementation Aspects (Inferred):** * **Responsible Agency:** The International Financial Services Centres Authority (IFSCA) is the responsible agency. * **Timelines:** The corrigendum comes into force on the date of its publication in the Official Gazette (April 29, 2022). * This change is effective immediately upon publication; entities should review their activities to confirm compliance with the amended definition. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is to: * Provide clarity and reduce ambiguity regarding the regulatory treatment of operating leases within IFSCs. * Establish a clear regulatory framework for operating leases, facilitating their use within the specified context. * Potentially encourage the use of operating leases in IFSCs by providing regulatory certainty. * Increase compliance by ensuring concerned entities know their activities related to operating leases and hybrid leases are financial products. **9. Conclusion:** The IFSCA's corrigendum clarifies the definition of a financial product to include operating leases (and hybrids) related to specific equipment. This amendment provides greater regulatory certainty, particularly for entities operating within IFSCs and those involved in leasing activities. This targeted change is likely to have a significant impact on the leasing landscape within IFSCs, influencing business decisions and compliance requirements. The explicit inclusion will ensure operating leases are now clearly defined as financial products, which may increase regulatory oversight in this area.

Key Entities Referenced