International Financial Services Centre -related topics

  • July 26, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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International Financial Services Centre -related topics

Subject: Economy

Section: External Sector

Context:

Recently, PM Narendra Modi is visiting to the Gujarat International Finance Tec-City (GIFT City)

Details:

  • He will launch the country’s first international bullion exchange –India International Bullion Exchange (IIBX) at the GIFT City
  • He will lay the foundation stone of the unified regulator– International Financial Services Centres Authority’s– headquarters building.
  • The prime minister will launch NSE IFSC-SGX Connect.

Concept:

India International Bullion Exchange (IIBX) 

  • India International Bullion Holding IFSC Limited (IIBH) is responsible for setting up the Bullion Exchange through its subsidiary, India International Bullion Exchange IFSC Limited (IIBX).
  • The exchange will have three vaults.
  •  Once gold is imported, it will be stored at the IFSC Authority-approved vault. Following this, a bullion depository receipt will be made and the gold will be ready for trading.
  • The RBI guidelines enable qualified jewellers to import gold through IIBX or other exchanges approved by IFSCA and the directorate general of foreign trade (DGFT).
  • It will facilitate 
    • efficient price discovery
    • assurance of responsible sourcing and quality
    • give impetus to the financialisation of gold in India

International Financial Services Centres Authority (IFSCA):

  • It was established on April 27, 2020 under the International Financial Services Centres Authority Act, 2019.
  • It is headquartered at GIFT City, Gandhinagar in Gujarat.
  • Role of IFSCA
    • The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India.
    • IFSCA has been established as a unified regulator with a holistic vision in order to promote ease of doing business in IFSC and provide a world class regulatory environment.
    • The main objective of the IFSCA is to develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform for the entire region and the global economy as a whole.
    • The IFSCA will not only regulate the nature of business which will be transacted in the IFSC but will also be regulating the functioning of the entities involved with transacting business in IFSC.
  • The IFSCA consists of nine members appointed by GOI. The members are:
    • Chairperson
    • 1 member from RBI
    • 1 member from SEBI
    • 1 member from PFRDA
    • 1 member from IRDAI
    • 2 members from the Finance Ministry
    • 2 members appointed on recommendation of a Selection Committee
    • The term of each member is three years subject to reappointment.

NSE IFSC-SGX Connect:

  • It is a framework between NSE’s subsidiary GIFT International Financial Services Centre (IFSC) and Singapore Exchange (SGX). 
  • The foundation for the Connect was laid in August 2019 when National Stock Exchange of India and SGX Group entered into a collaboration agreement to create a unified liquidity pool for NIFTY products in GIFT City via an innovative Connect model.
  • It will enable clients, investors and trading members of SGX who used to trade in NSE listed Indian securities through SGX to now trade in these securities through NSE IFSC.
  • This will help in transitioning the liquidity pool away from SGX to India’s foreign jurisdiction.
economy International Financial Services Centre -related topics