The International Financial Services Centres Authority (IFSCA) has issued a notification announcing the introduction of the International Financial Services Centres Authority (Capital Market Intermediaries) (Amendment) Regulations for the year 2023. These amendments aim to bring important changes to the regulations governing capital market intermediaries operating within the international financial services centres. In this article, we will analyze the key modifications made and their implications.
Analysis: The amendment regulations introduced by the IFSCA focus on enhancing the regulatory framework for capital market intermediaries. Regulation 2 of the Principal Regulations is amended to include a new definition for “capital market intermediary,” which refers to intermediaries registered with the Authority under these regulations. Additionally, the definition of a “distributor” is introduced, defining them as individuals engaging with clients on behalf of issuers or service providers to facilitate investment or subscription into “capital market products” or “capital market services.”
Furthermore, the amendments introduce the concept of a “registered distributor,” denoting a distributor who is registered with the Authority under these regulations. Regulation 3 of the Principal Regulations undergoes changes by omitting the word “and” in clause (g) and inserting a new clause (ga) covering distributors.
These amendments aim to streamline and regulate the activities of capital market intermediaries and distributors within the international financial services centres. By introducing clear definitions and registration requirements, the IFSCA seeks to enhance investor protection, improve transparency, and foster a conducive environment for capital market operations.
Conclusion: The International Financial Services Centres Authority (IFSCA) has taken a significant step by introducing the International Financial Services Centres Authority (Capital Market Intermediaries) (Amendment) Regulations for the year 2023. The amendments bring clarity to the regulatory landscape governing capital market intermediaries operating within the international financial services centres. By defining key terms and introducing registration requirements, the IFSCA aims to promote transparency, investor protection, and overall efficiency in the capital market operations within these centres. It is crucial for stakeholders to stay updated with these regulatory changes to ensure compliance and take advantage of the opportunities provided by the international financial services centres.
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
NOTIFICATION
Gandhinagar, the 3rd July, 2023
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (CAPITAL MARKET INTERMEDIARIES) (AMENDMENT) REGULATIONS, 2023
IFSCA/2023-24/GN/REG040.—In exercise of the powers conferred by sub-section (1) of Section 28 read with sub-section (1) of Section 12 and sub-section (1) of Section 13 of the International Financial Services Centres Authority Act, 2019, Section 28C of the Securities and Exchange Board of India Act, 1992, the International Financial Services Centres Authority hereby makes the following regulations, further to amend the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021, (hereinafter referred to as the Principal Regulations), namely: –
1. (1) These regulations may be called the International Financial Services Centres Authority (Capital Market Intermediaries) (Amendment) Regulations, 2023.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In regulation 2 of the Principal Regulations, after clause (g) of sub-regulation (1), the following clause (ga) shall be inserted, namely:—
“ “capital market intermediary” means an intermediary referred to in regulation 3 and is registered with the Authority under these regulations;”
3. In regulation 2 of the Principal Regulations, after clause (o) of sub-regulation (1), the following clause (oa) shall be inserted, namely:—
“ “distributor” means a person who for remuneration engages with clients on behalf of an issuer or a service provider to facilitate investment or subscription into “capital market products” or “capital market services”, as defined under circular no.817/IFSCA/Distribution/2022-23 dated December 21, 2022 issued by the Authority;”
4. In regulation 2 of the Principal Regulations, after clause (dd) of sub-regulation (1), the following clause (dda) shall be inserted, namely:—
“ “registered distributor” means a distributor registered with the Authority under these regulations;”
5. In regulation 3 of the Principal Regulations, in clause (g) under sub-regulation (1), the word “and” shall be omitted.
6. In regulation 3 of the Principal Regulations, after clause (g) of sub-regulation (1), the following clause (ga) shall be inserted, namely:—
“Distributors; and”
INJETI SRINIVAS, Chairperson
[ADVT.-III/4/Exty./250/2023-24]
Note:
1. The International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 were published in the Gazette of India: Extraordinary vide notification No. IFSCA/2021-22/GN/REG018 on 18th October 2021.
