International Financial Services Centres Authority (IFSCA) issued a circular on April 11, 2025, announcing amendments to the “Guidelines on setting up and operation of International Trade Finance Service Platform” originally released on December 23, 2024. The changes are in response to representations from ITFS operators and market participants. Key modifications were made to clause 12(2) of the guidelines. A clarification was added to item (i), defining Assets Under Management (AUM) as the total market value of financial assets owned or managed by the financier on behalf of clients. Item (iii) was updated to require financiers to demonstrate credit or debt recovery capabilities, either internally or via outsourcing. Item (iv) now mandates that financiers must be incorporated entities engaged in the business of factoring. Additionally, a new provision, item (v), was introduced, requiring that financiers and shareholders holding over 10% of share capital must not originate from jurisdictions identified by the Financial Action Task Force (FATF) as “High Risk – subject to call for action.” These amendments aim to improve regulatory clarity, ensure financier competence, and mitigate financial risks associated with high-risk jurisdictions. The circular was issued under the authority granted by the IFSCA (Finance Company) Regulations, 2021.
INTERNATIONAL FINANCIAL
SERVICES CENTRES AUTHOURITY
Circular No. IFSCA-FCR0ITFS/3/2024-Banking/2025/001 Dated: April 11, 2025
To,
All ITFS Operators in IFSC/participants of ITFS Platform
Subject: Amendment to the circular titled “Guidelines on setting up and operation of International Trade Finance Service Platform” dated December 23, 2024.
Reference may be drawn to Guidelines on setting up and operation of International Trade Finance Service Platform dated December 23, 2024 (“Guidelines”).
2. Based on the representation from ITFS operators and other market participants, It has been decided to make the following amendments in clause 12(2) of the Guidelines effective from the date of this circular:
a. following explanation is inserted in item (i) of clause 12(2)
“Explanation : For the purpose of this sub-section, AUM refers to the total market value of all financial assets owned by the financier or managed by it on behalf of its clients.”
b. Item (iii) of clause 12(2) is substituted by the following:
“(iii) The financier should have proven capability (either on its own or through outsourcing arrangements) for credit/ debt recovery;”
C. Item (iv) of clause 12(2) is substituted by the following:
“(iv) The financier shall be an incorporated entity carrying out the business of factoring;”
d. Further, the following item is added in clause 12(2):
“(v) The financier including any shareholders holding more than 10% of its share capital shall be from a jurisdiction which has not been identified in the public statement of Financial Action Task Force (FATF) as “High Risk Jurisdiction – subject to call for action.”
3. This circular is issued in exercise of the powers sub-regulation (1) of regulation 10 of International Financial Services Centres Authority (Finance Company) Regulations, 2021 and Clause 21(1) of Circular dated December 23, 2024.
Yours faithfully
Sd/-
(Supriyo Bhattacharjee)
Chief General Manager
Head -Department of Banking
