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 [email protected] Supriyo Bhattacharjee General Manager [email protected]

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.

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