The International Financial Services Centres Authority (IFSCA) has issued a circular emphasizing the requirement for Capital Market Intermediaries (CMIs) to maintain net worth, as mandated by Chapter II Regulation 6 of the IFSCA (Capital Market Intermediaries) Regulation, 2021. If a CMI fails to uphold the required net worth at any point, they will be prohibited from conducting any ongoing or new business activities within the International Financial Services Centre (IFSC) until their net worth is restored. The directive reaffirms the IFSCA’s authority to enforce penalties for non-compliance with these regulations. Issued under the powers granted by Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, the circular takes immediate effect. This regulatory clarification highlights the importance of financial compliance and ensures market intermediaries uphold stability within the IFSC framework. The circular can be accessed on the IFSCA’s official website.
International Financial Services Centres Authority
Circular No. F.No.: IFSCA-DSI/4/2024-Capital Markets Dated: September 05, 2024
To,
All Capital Market Intermediaries in the International Financial Services Centre (IFSC) (including Registered Distributors)
Dear Sir/Madam,
Sub: Maintenance of Net Worth by Capital Market Intermediaries
1. Reference is drawn to Chapter II Regulation 6 of IFSCA (Capital Market Intermediaries) Regulation, 2021, which mandates Capital Market Intermediaries (CMIs) to maintain Net Worth at all times.
2. In this regard, it is clarified that CMIs failing to maintain Net Worth at any time shall not undertake any existing or new business activity in IFSC till the time the net worth is restored.
3. This issues without prejudice to IFSCA’s power to take action for non-compliance with the aforesaid regulation.
4. This circular is issued in exercise of the powers conferred under sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, read with regulation 72 of IFSCA (Capital Market Intermediaries) Regulation, 2021, and shall come into force with immediate effect.
A copy of this circular is available on the website of International Financial Services Centres Authority at www.ifsca.gov.in
Yours faithfully,
Sd/-
Amit Prajapati
Deputy General Manager
Division of Supervision of Intermediaries
Email: [email protected]
Tel: +91-079-6180988
