- The Bill will be applicable to all International Financial Services Centres (IFSCs) set up under the Special Economic Zones Act, 2005.
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International Financial Services Centres (IFSC) Authority Bill, 2019
- The Bill will apply to all International Financial Services Centres (IFSCs) set up under the Special Economic Zones Act, 2005.
International Financial Services Centres Authority
- The Bill sets up the International Financial Services Centres Authority.
- It will consist of nine members, appointed by the central government.
- Members of the Authority will include:
- the Chairperson,
- one member each to be nominated from the RBI, the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA),
- two members from among officials of the Ministry of Finance, and
- Two members to be appointed on the recommendation of a Search Committee.
- Members will have a term of three years, subject to reappointment.
Functions of the Authority
- Regulate financial products (such as securities, deposits or contracts of insurance), financial services, and financial institutions which have been previously approved by any appropriate regulator (such as RBI or SEBI), in an IFSC.
- Recommending any other financial products, financial services, or financial institutions to the central government, this may be permitted in an IFSC.
International Financial Services Centres Authority Fund
- The Bill sets up the International Financial Services Centres Authority Fund.
- All grants, fees and charges received by the Authority, and
- All sums received by the Authority from various sources, as decided by the central government are added to fund.
- The Fund will be used for:
- salaries, allowances and other remuneration of members and employees of the Authority, and
- Expenses incurred by the Authority.
- Further, the central government may provide grants to the Authority for the regulation of IFSCs.
Performance Review Committee
- The Authority will constitute a Performance Review Committee to review its functioning.
- The Review Committee will consist of at least two members of the Authority.
- It will review whether:
- The Authority has adhered to the provisions of the applicable laws while exercising powers or performing functions,
- The regulations made by the Authority promote transparency and best practices of governance, and
- The Authority is managing risks to its functioning in a reasonable manner.
Transaction in foreign currency
- All transactions of financial services in IFSCs will be in such foreign currency as specified by the Authority, in consultation with the central government.