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Context - A Comprehensive Regulatory framework for the Investment Funds has been announced by the International Financial Services Centres Authority (IFSCA).

Key Features of the Regulatory Framework

• Mandatory for a Fund Management Entity to get registered with IFSCA.
  • Fund Management Entity manages different types of funds and schemes
• Venture Capital Schemes or non-retail schemes will qualify for a green channel.
  • Under the Green Channel, the Schemes filed can open for subscription by investors immediately upon filing with IFSCA.
• A framework has been prescribed for special situation funds to manage stressed assets.
• Environment Social Governance issues need to be an integral part of their investment strategies.
• Facilitate a self-managed investment fund of a family office has been provided in the regulations.
  • Family office for managing and preserving the wealth of the High Net worth Individuals (HNIs) and their families
• Provision for ‘Fund Lab’, fund managers may try new techniques in a controlled manner and build a track record for their fund.
• It proposed to facilitate retail close-ended schemes to invest in unlisted securities under certain conditions.
• The regulations highlighted the role of various entities, prescribed code of conduct, advertisement code, investment valuation norms and important governance requirements.

International Financial Services Centre

• The International Financial Services Centre was established at the Gujarat International Finance Tec-City (GIFT City) in Gandhinagar.
• The main objective of the International Financial Services Centre is to encourage financial services and transactions in India.
• It promotes business and regulatory environments like other international financial centres in London and Singapore.
• It ensures that Indian corporate get easier access to global financial markets.

International Financial Services Centres Authority

• It was established in 2020 as a statutory authority under the International Financial Services Centres Authority Act, 2019
• The Ministry of Finance has established International Financial Services Centres Authority to regulate all types of financial services in the International Financial Services Centres (IFSCs) in Gandhinagar (Gujarat).
• The main objective of the authority is to regulate financial products Such as Securities, deposits, insurance, financial services, and financial institutions In the International Financial Services Centres (IFSCs).
• The International Financial Services Centres Authority consist of 9 members, that are appointed by the central government:
  • The Chairperson of the authority.
  • One member from the RBI, SEBI, the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA).
  • 2 members from the Ministry of Finance.
  • 2 other members are appointed on the recommendation of a Selection Committee.
• All members have a term of 3 years, and they can be reappointed.

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1818820

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