**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on August 21, 2020, pertains to amendments to the SEBI International Financial Services Centres (IFSC) Guidelines, 2015. The circular, reference number SEBI/HO/MRD1/DSA/CIR/P/2020/154, aims to further streamline operations at IFSCs based on consultations with stakeholders.
The key amendment concerns Clause 19 of the SEBI IFSC Guidelines, 2015, relating to the preparation of financial statements for entities issuing and/or listing debt securities in IFSCs. These entities are required to prepare their statement of accounts in accordance with International Financial Reporting Standards (IFRS), US Generally Accepted Accounting Principles (US GAAP), Indian Accounting Standards (Ind AS), or accounting standards applicable in their place of incorporation. If an entity does not use IFRS, US GAAP, or Ind AS, it must include a quantitative summary of significant differences between its national accounting standards and IFRS in its disclosure documents filed with the exchange. However, if the issue is targeted to institutional investors, a quantitative summary is not required; a statement of differences between local accounting standards and IFRS, US GAAP, or Ind AS will suffice, along with a disclaimer regarding the absence of quantified effects and advising investors to make their own judgment.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect investor interests, promote development, and regulate the securities market.
The circular is available on the SEBI website (www.sebi.gov.in). For further information, contact Sanjay Purao, General Manager, Market Regulation Department, at sanjayp@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for securities market in India, also referred to as SEBI.
International Financial Services Centres: Special economic zones in India that provide financial services to non-residents and residents, also referred to as IFSC.
Securities and Exchange Board of India International Financial Services Centres Guidelines, 2015: A set of guidelines issued by SEBI for regulating IFSC, which was amended.
SEBI IFSC Guidelines, 2015: Abbreviated reference to the Securities and Exchange Board of India International Financial Services Centres Guidelines, 2015.
IFRS: International Financial Reporting Standards. Accounting standards that may be used by entities issuing debt securities in IFSC.
US GAAP: United States Generally Accepted Accounting Principles. Accounting standards that may be used by entities issuing debt securities in IFSC.
IND AS: Indian Accounting Standards. Accounting standards that may be used by entities issuing debt securities in IFSC.
Securities and Exchange Board of India Act, 1992: The act of the Parliament of India that established the Securities and Exchange Board of India (SEBI).
भारतीय प्रततभूतत और वितिमय बोर्ड
Securities and Exchange Board of India
CIRCULAR
SEBI/HO/MRD1/DSAP/CIR/P/2020/154 August 21, 2020
All Recognised Stock Exchanges in International Financial Services Centres
(IFSC)
Dear Sir / Madam,
Subject: Securities and Exchange Board of India (International Financial Services
Centres) Guidelines, 2015 - Amendments
Kindly refer to SEBI (IFSC) Guidelines, 2015 which were notified by SEBI on March 27,
2015, SEBI Circular dated August 31, 2017 and February 27, 2020.
2. In order to further streamline the operations at IFSC, based on consultations with
stakeholders, it has been decided to amend provisions of the aforesaid guidelines,
which are as follows:
Clause 19 of SEBI (IFSC) Guidelines, 2015 is being amended to read as follows:
“19. The entities issuing and/or listing their debt securities in IFSC shall prepare their
statement of accounts in accordance with IFRS/ US GAAP/ IND AS or accounting
standards as applicable to them in their place of incorporation. In case an entity does
not prepare its statement of accounts in accordance with IFRS/ US GAAP/ IND AS,
a quantitative summary of significant differences between national accounting
standards and IFRS shall be prepared by such entity and incorporated in the relevant
disclosure documents to be filed with the exchange.
Provided that quantitative summary of significant differences is not required and a
statement of differences between local accounting standards and IFRS/ US GAAP/
IND AS would suffice, if the issue is targeted to institutional investors, along with a
disclaimer that issuer has not quantified the effect of applying IFRS/ US GAAP / IND
AS to its financial information and investor may make their own judgment in
accessing the financial information”.भारतीय प्रततभूतत और वितिमय बोर्ड
Securities and Exchange Board of India
3. This circular is issued in exercise of powers conferred under Section 11 (1) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of investors
in securities and to promote the development of, and to regulate the securities market.
This circular is available on SEBI website at www.sebi.gov.in.
Yours faithfully,
Sanjay Purao
General Manager
Market Regulation Department
Email: sanjayp@sebi.gov.in