The International Financial Services Centres Authority (IFSC-A) is likely to come up with regulations with respect to direct listing of companies.
Speaking at the Global Fintech Fest, K Rajaraman, chairman of the IFSC-A, said the authority is in the midst of processing the ministry’s notifications. A working group has also been set up to work with other regulators like Sebi, the RBI, etc. Amendments to existing regulations should be complete by the end of this year.
Also speaking at the same event, G Padmanabhan, former ED of RBI, pointed out that the IFSC-A has recommended having a different Companies Act for the jurisdiction, given that the IFSC is essentially a foreign location within India.
Rajaraman said regulations pertaining to payments and settlements at the IFSC-A will be finalised in the next few months, which will enable faster settlement. At present, settlement between parties takes place through the corresponding banks.
In addition, a real-time gross settlement or RTGS system is also likely in the next six months. These two measures will help ramp up the efficiency of the financial system.
Rajaraman showed optimism over bullion trading, with the infrastructure, bullion exchange, settlement systems, and vaults now in place. There is strong consideration towards adding silver and precious metals, he said, along with derivatives trading in gold. At present, a few regulatory tweaks are in the works.
“We offer a competitive tax structure, including 10 years of corporate tax exemption out of 15, along with exemptions from dividend distribution tax, security transactions tax, commodity transaction tax, and more. The IFSCA has facilitated start-up access and encouraged innovative financial product development, implementing over 30 streamlined global-standard regulations,” he said.
In response to a question on likely challenges in allowing Indian firms to list on foreign exchanges on the IFSC, Rajaraman said the working group will look into them and address it by discussing it with various stakeholders.
He said that in the case of the Nifty50, they changed the timing as to match the same with Singapore.
Finance Minister Nirmala Sitharaman last month announced that the government would permit Indian listed and unlisted entities to list on foreign bourses via the IFSC route.
Experts have, however, flagged challenges such as getting foreign exchanges to set up units at the IFSC, time zone difference, and tax complications.