Sebi clarifies on status of IFSC intermediaries

Market regulator Securities and Exchange Board of India (Sebi) has clarified that all intermediaries, except banks, operating in the international financial services centres have to form companies for such operations.

Banking units operating in IFSCs need not form separate companies as they are already part of professionally operated companies.

"Any recognised entity or entities desirous of operating in IFSC as an intermediary, may form a company to provide such financial  services  relating  to  securities  market, as  permitted  by  the board," Sebi stated in a release on Thursday.

''Based on the representations received from the market participants and Reserve Bank of India (RBI) circular dated  April 10, 2017, it is clarified  that an IFSC Banking Unit (IBU) set up in IFSC shall be permitted to act as a trading member of  an  exchange or a professional  clearing  member of a  clearing  corporation in IFSC, without forming a separate company, subject to the conditions mentioned in the aforesaid RBI circular,'' the release added.

Sebi said the clarification is intended to protect the interests of investors in  securities  and  to  promote  the  development  of, and to regulate the securities market.