Panel Proposes Regulatory Regime for Financial Services in GIFT IFSC

New Delhi, Mar 28 - A significant stride towards establishing GIFT IFSC as a premier Global Finance and Accounting Hub has been taken, with an expert committee recommending the formulation of a comprehensive regulatory framework. This framework is intended to address various critical aspects such as bookkeeping, accounting, taxation, and financial crime compliance. The International Financial Services Centre (IFSC) in GIFT City, Gujarat, stands as the first of its kind, nestled within a Multi-Service Special Economic Zone and regulated by the International Financial Services Centres Authority (IFSCA).

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The committee, which was set up by the Ministry of Finance in January this year, presented its findings to the IFSCA Chairperson on March 26. According to the finance ministry, the report advocates for a new regulation that encompasses a broad and inclusive definition for Bookkeeping, Accounting, Taxation, and Financial Crime Compliance Services. This move is aimed at ensuring a robust regulatory environment within the IFSC.

As part of its recommendations, the committee has outlined that businesses intending to set up in IFSC for offering these services should not be established by dividing or reorganizing an already existing business in India. A key recommendation includes that such entities should operate either as a company or a Limited Liability Partnership (LLP). Furthermore, branches of Indian companies or LLPs may be allowed if they are regulated by one of the three professional bodies - ICAI, ICSI, or ICMAI. Additionally, foreign entities without any presence in India may also establish branches in IFSC under certain conditions.

The panel has underscored the importance of ongoing training and development programs for personnel engaged in these services at GIFT IFSC. This initiative is crucial for maintaining high standards of professionalism and expertise in the financial sector.

To bolster GIFT IFSC's position as a leading hub for bookkeeping, accounting, taxation, and financial crime compliance services, the committee has proposed several strategies. These include focused marketing efforts, forging global partnerships, and establishing a centre of excellence. Such measures are expected to enhance GIFT IFSC's appeal to international businesses and professionals alike.

This comprehensive approach towards developing a regulatory regime and promoting GIFT IFSC underscores India's commitment to becoming a key player in the global financial services landscape. With these initiatives in place, GIFT IFSC is poised for significant growth and development in the coming years.