Introduction: The International Financial Services Centres Authority (IFSCA) has issued Circular F.No 329/IFSCA/Bullion MIIs/2023-24/03 on December 11, 2023, addressing Qualified Suppliers for the supply of bullion on the India International Bullion Exchange. This article delves into the key provisions, guidelines, and changes outlined in the circular.
Detailed Analysis:
1. Import of Gold and Silver: The DGFT, Ministry of Commerce and Industry, has specified that Qualified Jewellers, as notified by IFSCA, can import gold and silver through India International Bullion Exchange IFSC Ltd. (IIBX). The circular outlines the specific ITC(HS) Codes and provides guidelines for Qualified Jewellers.
2. Consolidated Circular for Gold and Silver Import: In response to DGFT notifications, IFSCA has issued a consolidated circular (F.No 329/IFSCA/Bullion MIIs/2023-24/02) on December 11, 2023. This circular supersedes previous ones and streamlines the process for the import of gold and silver in line with DGFT regulations and RBI directions.
3. Participation of Qualified Suppliers on IIBX: The circular emphasizes the facilitation of bullion supply on IIBX by enabling eligible entities as Qualified Suppliers. It introduces two modes of transacting on IIBX – as a client (QS-client) of a Bullion Trading Member or as a Qualified Supplier – Limited Purpose Trading Members (now renamed as ‘Special Category’ Clients).
4. Renaming of Limited Purpose Trading Members (LPTMs): To accurately represent the nature of participation, the circular announces the renaming of ‘Limited Purpose Trading Members (LPTMs)’ to ‘Special Category’ Clients. This change aims to provide clarity and align with the roles of these participants on IIBX.
5. Regulatory Authority and Legal Basis: The circular clarifies that the issuance is in exercise of the power conferred under Section 12 of the International Financial Services Centres Authority Act, 2019, read with Regulation 58 of the International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020. It aligns with DGFT Notifications mentioned in the circular.
6. Access to Circular: The article directs readers to access the complete circular on the official website of IFSCA. A link is provided for easy reference to the document, ensuring transparency and accessibility for stakeholders.
Conclusion: The IFSCA Circular F.No 329/IFSCA/Bullion MIIs/2023-24/03 plays a pivotal role in regulating and streamlining the import of gold and silver through the India International Bullion Exchange. By outlining guidelines for Qualified Suppliers, renaming participants, and aligning with regulatory notifications, IFSCA aims to enhance the efficiency and transparency of bullion transactions within the IFSC. Stakeholders are encouraged to review the circular on the IFSCA website for comprehensive understanding and compliance. For further inquiries, Chief General Manager Kamlesh Sharma’s contact details are provided.
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INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
Circular No. F. No 329/IFSCA/Bullion MIIs/2023-24/03 Dated: December 11, 2023
To
Bullion Exchange in the International Financial Services Centre (IFSC)
Bullion Clearing Corporation in the IFSC
Bullion intermediaries in the IFSC
Vault Managers in the IFSC
All market participants on the Bullion Exchange in the IFSC
Dear Sir/Madam
‘Qualified Suppliers’ for supply of bullion on India International Bullion Exchange
1. The Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry vide its Notification No. 49/2015-2020 dated January 05, 2022, has inter alia specified that Qualified Jewellers as notified by the International Financial Services Centres Authority (IFSCA) will be permitted to import gold under ITC(HS) Codes 71081200 and 71189000, through India International Bullion Exchange IFSC Ltd. (IIBX). Accordingly, IFSCA, vide its Circulars dated January 19, 2022 and August 05, 2022, has issued guidelines and Standard Operating Procedure for Qualified Jewellers to import gold through IIBX.
2. Subsequently, DGFT has issued a Notification No. 35/2023 dated October 11, 2023 wherein it has inter alia specified that Qualified Jewellers as notified by the IFSCA will be permitted to import silver under ITC(HS) Codes 71069110 and 71069290 through IIBX. Further, in terms of the extant Import and Export Policy issued by the DGFT, import of silver bars under ITC(HS) Code 71069220 is free subject to RBI regulations.
3. Further, with a view to enable import of silver by eligible entities through IIBX, a consolidated Circular (F. No 329/IFSCA/Bullion MIIs/2023-24/02) dated December 11, 2023, superseding the abovementioned two IFSCA circulars dated January 19, 2022 and August 05, 2022, has been issued by the IFSCA for the purposes of import of gold and silver in accordance with the abovementioned DGFT notifications, and the circulars/directions issued by the Reserve Bank of India (RBI) in this respect.
4. Supply of bullion at IIBX, by enabling eligible supplier entities as Qualified Suppliers to participate on IIBX, has been facilitated by the IFSCA vide its Circular 415/IFSCA/Consolidated Operating Guidelines/2021-22 dated August 18, 2022. As per the Circular, Qualified Supplier can transact on IIBX either as a client (QS-client) of a Bullion Trading Member or as a Qualified Supplier – Limited Purpose Trading Members (QS-LPTM).
5. With a view to more accurately represent the nature of participation of Limited Purpose Trading Members (LPTMs) as clients, it has been decided to rename ‘LPTM’ as ‘Special Category’ Client. Accordingly, the words ‘Limited Purpose Trading Member(s)’ or ‘LPTM(s)’ in the IFSCA Circular dated August 18, 2022 may be read as ‘Special Category’ client(s).
6. All other provisions contained in the aforementioned IFSCA Circular dated August 18, 2022 shall remain unchanged.
7. 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 and in pursuance of DGFT Notifications mentioned in Para 1 and 2 of this Circular.
8. A copy of this Circular is available on the website of International Financial Services Centres Authority at www.ifsca.gov.in at “Legal →Circulars”.
Yours faithfully
(Kamlesh Sharma)
Chief General Manager
Department of Metals and Commodities
email: kamlesh.sharma27@ifsca.gov.in
Tel: +91 79 6180 9810
