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The International Financial Services Centers Authority (IFSCA) has issued a circular announcing amendments to the guidelines for Vault Managers operating within International Financial Services Centres (IFSCs). This article delves into the modifications introduced in the circular dated April 1, 2024, focusing on changes in registration procedures, fees, and security deposit requirements.

Detailed Analysis

1. Overview of Amendments: The circular modifies certain clauses of the IFSCA (Vault Manager) Circular, 2021, originally issued on August 25, 2021. Notable amendments include provisions related to the registration of additional vaults, security deposit requirements, and fee structures.

2. Registration of Additional Vaults: The revised circular allows registered Vault Managers to apply for the registration of additional vaults under their existing registration. This amendment streamlines the process for expanding vault facilities within IFSCs, enhancing operational flexibility for Vault Managers.

3. Exemption from Additional Security Deposit: An important proviso has been inserted exempting registered Vault Managers from providing additional security deposits when registering additional vaults under existing registrations. This provision aims to reduce financial burden and administrative complexities for Vault Managers expanding their operations.

4. Retention of Security Deposits: The circular specifies that the security deposit furnished by Vault Managers with the bullion depository shall remain retained until the Vault Manager surrenders the certificates of registration for all its vaults registered with the Authority. This provision ensures compliance with regulatory requirements and underscores the importance of maintaining security standards.

Conclusion

In conclusion, the IFSCA’s circular regarding amendments to the Vault Manager guidelines introduces significant changes aimed at facilitating the expansion of vault facilities within IFSCs while ensuring regulatory compliance and security standards. These amendments provide clarity and flexibility to Vault Managers, thereby fostering a conducive environment for the growth of the financial services sector within IFSCs. Stakeholders are encouraged to review the circular thoroughly and adapt their operations accordingly to leverage the benefits of these regulatory changes.

IFSCA

INTERNATIONAL FINANCIAL SERVICE CENTERS AUTHORITY

Circular No. F. No. 415/IFSCA/Consolidated Operating Guidelines/2021-22 Dated:  April 1, 2024

To,
All Vault Managers in International Financial Services Centres (IFSCs)

Sir/Madam,

Sub: Amendment to the IFSCA (Vault Manager) Circular, 2021 dated August 25, 2021

1. The IFSCA (Vault Manager) Circular, 2021 (herein after referred to as ‘Circular’), issued as part of Annexure II of the Consolidated Operating Guidelines dated August 25, 2021, specified the applicable fees for Vault Managers.

2. In partial modification to the Circular dated August 25, 2021 –

i. The sub-clause (4) of clause 1 of Chapter I may be read as –

(4) A registered Vault Manager may make an application in such form and manner as may be specified by the Authority for registration of additional vault(s) under its existing registration.

ii. The following proviso is inserted in sub-clause (1) of clause 4 of Chapter II –

Provided that no additional security deposit shall be required in case of registration of additional vault(s) under the existing registration of the registered Vault Manager.”

iii. The sub-clause (6) of clause 11 of Chapter III may be read as –

(6) The security deposit furnished by the Vault Manager with the bullion depository shall continue to be retained until such time as the Vault Manager surrenders the certificates of registration for all its vaults registered with the Authority.

3. This Circular has been issued in exercise of the power conferred under section 12 of the International Financial Services Centres Authority Act, 2019 r/w Regulation 58 of the International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020.

4. A copy of this circular is available on the website of International Financial Services Centres Authority a www.tifsca.gov.in.

Yours faithfully
(Ramakrishnan Padmanabhan)
General Manager
Market Development Division
Department of Metals and Commodities
Email: Ramakrishnan.pad@ifsca.gov.in
Tel: +91-79-61809849

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