International Financial Services Centres Authority
F.No.110/IFSCA/Banking Regulation/2021-22/9
November 12 , 2021
To,
All IFSC Banking Units
Dear Sir/Madam,
Amendments and additions to IFSCA Banking Handbook and other issues
IFSC Banking units (IBUs) may refer to circular F.No.110/IFSCA/Banking Regulation/2021-22/ 6 dated August 13, 2021 on the issuance of IFSCA Banking Handbook.
2. Based on the feedback received from IBUs certain amendments/additions have been carried out to the contents of the Handbook. The list of such amendments/additions is enclosed in the annexure to this circular.
3. The following new modules have been added to the Handbook:
a. FX Prime Brokerage – inserted as a Module of the Conduct of Business Handbook
b. Undertaking Business in Foreign Currency – inserted as Module of the Conduct of Business Handbook.
4. IBUs may note that the provisions of the circulars issued by the Reserve Bank of India (RBI) and adopted by IFSCA vide its circular F.No.110/IFSCA/Banking Regulation/2020-21/1 dated December 4, 2020 shall cease to be applicable to the operations of the IBUs from the date of coming into effect of the directions in the Handbook i.e., January 1, 2022. A circular formally withdrawing the RBI circulars adopted by IFSCA shall be issued on December 31, 2021.
5. Further, provisions of the circulars pertaining to IBUs issued by the Authority has been duly incorporated in the Handbook and these circulars shall cease to be applicable from the date of coming into effect of the directions in the Handbook i.e., January 1,2022. A circular formally withdrawing the circulars issued by IFSCA shall be issued on December 31, 2021.
6. IBUs are directed to ensure compliance to the directions this circular.
| Yours faithfully, | |
| Kamlesh Sharma General Manager kamlesh.sharma27@ifsca.gov.in | Supriyo Bhattacharjee General Manager supriyo.b@ifsca.gov.in |
Annexure
List of amendments/additions to provisions under the IFSCA Banking Handbook
|
GENERAL DIRECTIONS |
||||
| S.N. | Module No. |
Module Name |
Section | Amendment/addition |
| 1. | 1 | LIBU | 1 (iii) | Requirement of license – for setting up Representative Offices (ROs) |
| 2. | 1 | LIBU | 4 | Transitional Provisions |
| 3. | 2 | GOV | 2 (c) | Definition of the Governing Body |
| 4. | 2 | GOV | 8 | Staffing |
| 5. | 3 | CODF | 3 (i) (a) (i), 3 (c), 4 (i) (a) (i) |
Insertion of the term –‘ Head-IBU’ |
| 6. | 3 | CODF | footnote no. 7 & 8 |
Application fee for approved individual |
| 7. | 3 | CODF | Annex | Application for Approved Individual Status in an IBU to exercise controlled functions. |
| 8. | 5 | SYSCO | 3 (ii) | Outsourcing |
| 9. | 5. | SYSCO | 5 (ii) (b) | Record Keeping |
| 10. | 6 | SUP | 2 (iv) & (v) | Powers of Supervision over IBUs and Banking business in IFSC |
|
CONDUCT OF BUSINESS DIRECTIONS |
||||
| S.N. | Module No. |
Module Name |
Section | Amendment/addition |
| 1. | 1 | ACBU | 2 (iii) | Definition of ‘Client’ |
| 2. | 1 | ACBU | Footnote no. 1 |
Permitted activities |
| 3. | 1 | ACBU | 4 (xi) | Acting as a Portfolio Manager |
| 4. | 1 | ACBU | 4 (xii) | Providing Investment Advisory Services |
| 5. | 1 | ACBU | 4 (xiv) | Bullion trading member and clearing member in GIFT IFSC |
| 6. | 1 | ACBU | 4 (xvii) | Acting as FX Prime Brokerage |
| 7. | 1 | ACBU | 4 (xviii) | Undertaking remittances |
| 8. | 1 | ACBU | 4 (xxvi) | Operating as an Investment Banker |
| 9. | 1 | ACBU | 4 (xxvii) | Undertake transfer of loan assets |
| 10. | 1 | ACBU | 4 (xxviii) | Undertake negotiation of letter of credit of constituents |
| 11. | 2 | BIFC | New module introduced |
Undertaking business in foreign currency |
| 12. | 4 | COMFP | 2 | Definition of ‘Financial Promotion’ |
| 13. | 7 | OEOH | 4 | Transaction at off-market rates |
| 14. | 11 | ACDE | 4 (i), (iii) & (iv) | Interest rate framework and other requirements |
| 15. | 12 | REPO | 6 (v) | Activities of ROs |
| 16. | 12 | REPO | 8 (i) (ii) (iii) (v) & (vii) | Administration |
| 17. | 13 | OTDE | 1 (iii) , 3 (ii) & (iii), 5 (d), 18 (ii) & Annex 2- section 4 |
OTC derivatives on Indian Government Bonds (IGBs) and State Development Loans (SDLs) |
| 18. | 13 | OTDE | 9 (ii) | Exchange of margin |
| 19. | 13 | OTDE | 2, 7, 9, 16 | The currency for expression of various limits changed from USD to Euro – in line with the guidelines of BIS and FSB |
| 20. | 14 | FXPB | New module introduced |
FX Prime brokerage |
| 21. | 16 | PRCR | 3 (iv) | General condition on providing credit |
| PRUDENTIAL DIRECTIONS | ||||
| S.N. | Module No. |
Module Name |
Page No. | Amendment/addition |
| 1 | 1 | GENPRU | 7. | Guidance note on stress testing at IBU level |
| 2 | 3 | PRDS | 14 | Guidance note on public disclosure of IBU’s financial statement. |
