𝐈𝐅𝐒𝐂𝐀 𝐈𝐧𝐭𝐫𝐨𝐝𝐮𝐜𝐞𝐬 𝐭𝐡𝐞 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐥 𝐆𝐮𝐢𝐝𝐚𝐧𝐜𝐞 𝐒𝐜𝐡𝐞𝐦𝐞, 2024

International Financial Services Centres Authority (IFSCA) has recently launched the Informal Guidance Scheme, 2024, set to take effect from January 1, 2025.

The scheme is tailored to address unique challenges faced by financial institutions and individuals in interpreting regulatory provisions within the IFSC’s framework. It offers a structured mechanism to seek clarity on potential business activities and transactions regulated by IFSCA.

𝐖𝐡𝐨 𝐂𝐚𝐧 𝐀𝐩𝐩𝐥𝐲?
(a) Licensed, registered, or authorized entities under IFSCA.
(b) Individuals planning to undertake transactions involving financial products or services.
(c) Persons intending to establish units in the IFSC.

𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐆𝐮𝐢𝐝𝐚𝐧𝐜𝐞 𝐎𝐟𝐟𝐞𝐫𝐞𝐝
(a) No-Action Letters: Indicate whether IFSCA would recommend regulatory or enforcement action for a proposed activity or transaction. Such type would be ideal for entities seeking assurance before undertaking specific actions.
(b) Interpretive Letters: Provide interpretations of legal provisions, regulations, or circulars under IFSCA’s purview, including those issued by Reserve Bank of India (RBI), SEBI, Insurance Regulatory and Development Authority of India, and Pension Fund Regulatory and Development Authority (PFRDA) prior to establishment of IFSCA. Assist businesses in understanding regulatory applicability to their operations.

The Applicants will be required to pay a fee of USD 1,000 along with the application wherein the submissions would include comprehensive legal analysis and demonstrate relevance to the applicant’s activities.

The guidelines also prescribes 30-day timeline for disposal of the application.

Departments may decline application in cases where the query is general and lacks sufficient disclosure of facts, is based on hypothetical situations, or if the applicant has no direct or proximate interest. Applications may also be rejected if they fail to cite applicable legal provisions, if a no-action or interpretive letter has already addressed a similar issue, or if an investigation, inquiry, or enforcement action is ongoing, or if the matter is sub judice, if policy concerns prevent a response, or in other cases deemed inappropriate by the Department

The IFSCA has explicitly clarified the non-binding and non-conclusive nature of Informal Guidance under its scheme. Any letter issued by the Department pursuant to this scheme is not to be considered a conclusive decision or determination of any question of law or fact by the Authority. It does not constitute an order of the Authority and is not subject to appeal

Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com.

Copy of the circular is enclosed.