Foreign Exchange Management (International Financial Services
Centre) Regulations 2015
Regulations and Guidelines on IFSC
[Ref: A.P.
(DIR Series) Circular No.92 dated 31 March 2015]
Subject: Operational guidelines on International Financial
Services Centre (IFSC)
Attention of Authorised Dealers
Category – I (AD Category - I) banks is invited to the Foreign Exchange
Management (International Financial Services Centre) Regulations 2015 dated
March 2, 2015, a copy of which is at Annex.
2. In terms of the above Regulations, a financial institution or a
branch of a financial institution set up in the IFSC and permitted / recognised as such by the Government or a Regulatory
Authority shall be treated as person resident outside India. Therefore, their
transaction with a person resident in India shall be treated as a transaction
between a resident and non- resident and shall be subject to the provisions of
Foreign Exchange Management Act, 1999 and the Rules/Regulations/Directions
issued thereunder.
3. The financial transaction in this context shall mean making or
receiving payment, drawing, issuing or negotiating any bills of exchange or
promissory note, transferring any security or acknowledging any debt.
Similarly, financial service shall mean any activity which a financial
institution is permitted to carry on by the Respective Act of the Parliament or
Government of India or any Regulatory Authority empowered to regulate the
concerned financial institution.
4 It may be noted that subject to the provisions of Section 1 (3) of
Foreign Exchange Management Act, 1999, nothing contained in any other
Regulations shall apply to a financial institution or a branch of a financial
institution set up in an IFSC unless there is some express and specific
provision to that effect in the Foreign Exchange Management (International
Financial Services Centre) Regulations 2015 or the other Regulations.
5. AD Category – I banks may bring the contents of this circular to
the notice of their constituents and customers concerned.
6. Reserve Bank of India has issued the subject Notification through
the Foreign Exchange Management (International Financial Services Centre)
Regulations, 2015 which have been notified vide Notification
No.FEMA.339/2015-RB dated March 2, 2015, vide G.S.R. No. 218(E) dated March 23,
2015.
7. The
directions contained in this circular have been issued under section of 47
Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions / approvals, if any, required under any other law.
Annex
RESERVE BANK OF INDIA
(Foreign Exchange
Department)
(CENTRAL OFFICE)
NOTIFICATION
Mumbai, the 2nd March, 2015
Foreign Exchange
Management (International Financial Services Centre) Regulations, 2015
G.S.R. 218(E).-L'1
exercise of the powers conferred
by section 47 of the Foreign
Exchange Management Act, 1999 (42 of 1999), the Reserve Bank makes the following regulations relating to financial institutions set up
in International Financial
Services Centres, namely:-
1. Short title and commencement:-
i. These regulations may be called the Foreign Exchange
Management (International Financial Services Centre) Regulations, 2015.
ii They shall come into force from the date of their publication in the Official
Gazette.
2. Definitions:-
In these Regulations unless
the context requires
otherwise-
(a) ‘Act’ shall mean the Foreign Exchange Management Act, 1999 (42 of 1999);
(b) ‘Financial
Institution’ shall include
(i) a company, or
(ii) a firm, or
(iii) an association of persons or a body of individuals, whether
incorporated or not, or
(iv) any artificial
juridical person, not falling within
any of the preceding categories engaged in rendering
financial services or carrying out financial transactions.
Explanation:
For the purpose of this sub-regulation, and without any loss of generality of the above, the
expression 'financial institution ' shall include
banks, non-banking
financial companies, insurance
companies, brokerage firms, merchant
banks, investment banks, pension funds, mutual funds, trusts, exchanges, clearing houses, and any other entity that may be specified by
the Government of India or a Financial Regulatory Authority.
(c) ‘Financial service’ shall mean activities a financial institution
is allowed to carry
out as specified in the respective Act of the Parliament or by the Government of India or by
any Regulatory Authority empowered
to regulate the concerned financial institution.
(d) ‘Financial transaction' shall mean making any payment to, or for the credit
of any person, or
receiving any payment for, by order or on behalf of any person, or drawing, issuing
or negotiating any bill of exchange
or promissory note, or transferring
any security or acknowledging any debt.
(e) 'FMC' shall
mean the Forward
Market Commission established under the Forward Contracts
(Regulation) Act, 1952 (74 of 1952).
(f) ‘’International Financial Services
Centre' or 'IFSC' shall have the same meaning given in Section 2 (q) of the Special Economic
Zones Act, 2005 (28 of2005).
(g) 'IRDA' shall mean the Insurance Regulatory and Development Authority established under the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).
(h) 'PFRDA' shall mean the Pension Fund Regulatory and Development Authority
established under the Pension Fund
Regulatory and Development Authority
Act, 2013 (23 of 2013).
(i) 'Regulatory
Authority' shall include
Reserve Bank of India (RBI), Securities Exchange
Board of India (SEBI), Insurance Regulatory Development Authority
(IRDA), Pension Fund Regulatory and Development Authority (PFRDA_, Forward
Market Commission (FMC) or any
other statutory authority
empowered to regulate a
financial institution under the Indian laws.
(j) 'SEBI' shall mean the Securities and Exchange Board of India established under the Securities and Exchange Board of India
Act, 1992 (15 of 1992).
(k) The .words and expressions used but not specified in these Regulations shall have the same
meanings respectively assigned to them in the Act.
3. Any financial institution or branch of a
financial institution set up m the 1.1:' SC
and permitted/recognised as such
by the Government of India or a Regulatory authority shall be treated as a
person resident outside
India.
4. A financial institution or branch of a financial
institution shall conduct
such business in such
foreign currency and with such persons, whether resident
or otherwise, as the concerned Regulatory Authority
may determine.
5. Subject to the provisions of Section 1(3) of the Act, and save as otherwise provided
in these Regulations or any other Regulations or directed by the Reserve
Bank of India from time to time, nothing contained in any other regulations shall apply to a financial
institution or branch
of a financial institution set up
in an IFSC.
[No. FEMA/339/2015-RB]