IFSCA - Regulations, Listing and Compliances · IFSCA Ecosystem and Regulatory Framework

Composition of the Authority under Section 5 of the IFSCA Act

Updated 11 October 2026 · Fact-checked

Section 5 of the IFSCA Act, 2019 says the Authority has nine Members, all appointed by the Central Government: a Chairperson, one nominee each of RBI, SEBI, IRDAI and PFRDA, two Finance Ministry officials, and two other Members chosen on a Selection Committee's recommendation. To answer, list the categories and state who nominates each.

Understand Composition of the Authority (Section 5)

The International Financial Services Centres Authority (IFSCA) is the single regulator for financial products, services and institutions in the IFSCs. Section 5 tells you who sits on it. Think of it as a board with three kinds of seats: a head, seats for other financial regulators, and seats for government and independent people.

Section 5(1) says the Members are appointed by the Central Government. Even the members nominated by RBI, SEBI, IRDAI and PFRDA are appointed by the Central Government. The regulators only nominate. This is a point examiners like to test.

The composition has four groups. (a) A Chairperson. (b) One Member each nominated by the Reserve Bank of India, SEBI, IRDAI and PFRDA, all ex officio. (c) Two Members from the officials of the Ministry dealing with Finance, nominated by the Central Government, also ex officio. (d) Two other Members appointed by the Central Government on the recommendation of a Selection Committee. That gives 1 + 4 + 2 + 2 = 9 Members.

Section 5(2) separates whole-time and part-time roles. The Chairperson must be whole-time. The two clause (d) Members may be whole-time or part-time, as the Central Government thinks fit. Section 5(3) sets the quality test: persons of ability, integrity and standing, with capacity in financial sector matters or special knowledge or experience of law, finance, economics, accountancy, administration, or any other useful discipline in the Central Government's opinion.

Section 5(4) says the Selection Committee's members and the manner of its constitution are as prescribed. Section 27(2)(a) lets the Central Government make rules on this. So the Act gives the structure and the rules fill in the detail.

Key rules to remember

Total strength of the Authority: 1 Chairperson + 4 regulator nominees + 2 Finance Ministry officials + 2 Selection Committee Members = 9 Members; Section 5(1). Count clause by clause: (a) 1, (b) 4, (c) 2, (d) 2.
Regulator nominees (clause (b)): One Member each from RBI, SEBI, IRDAI and PFRDA, ex officio; They are nominated by the regulators but appointed by the Central Government.
Finance Ministry Members (clause (c)): Two officials of the Ministry dealing with Finance, nominated by the Central Government, ex officio; Nominated by the Central Government itself, not by any regulator.
Independent Members (clause (d)): Two Members appointed by the Central Government on the recommendation of a Selection Committee; Only these two may be whole-time or part-time, as the Central Government deems fit.
Whole-time or part-time: Chairperson: whole-time. Clause (d) Members: whole-time or part-time; Section 5(2). The Act does not say that ex officio Members are whole-time.
Qualification test: Ability, integrity and standing + capacity in financial sector matters or special knowledge or experience of law, finance, economics, accountancy, administration or another useful discipline; Section 5(3). Judged by the Central Government's opinion for the 'other discipline' limb.
Selection Committee: Members and manner of constitution as prescribed; Section 5(4), read with Section 27(2)(a) (rule-making power).

How to solve Composition of the Authority (Section 5) questions

Use this method for any question on who forms the Authority, who appoints them, or whether a given appointment is valid.

1Quote the provision: Section 5 of the IFSCA Act, 2019, and say the Authority consists of Members appointed by the Central Government.
2List the four categories in order: Chairperson; RBI, SEBI, IRDAI and PFRDA nominees; two Finance Ministry officials; two Selection Committee Members.
3Name who nominates or recommends each category, and mark which are ex officio.
4Apply Section 5(2): the Chairperson is whole-time; clause (d) Members may be whole-time or part-time.
5Apply Section 5(3) if the facts mention a person's background: ability, integrity and standing, plus financial sector capacity or relevant expertise.
6If the facts involve the Selection Committee, state that its composition and constitution are prescribed under Section 5(4) and Section 27(2)(a).
7Compare each fact in the question with these rules and decide whether the composition or appointment is in order.
8Conclude clearly in one or two lines, restating the total of nine Members where relevant.

Quickest way: The 1-4-2-2 count

When to use it: Use it when you have little time and the question asks you to describe or list the composition of the Authority.

Write 1-4-2-2 at the top of your answer.
Expand: 1 Chairperson; 4 nominees (RBI, SEBI, IRDAI, PFRDA); 2 Finance Ministry officials; 2 Selection Committee Members.
Add one line: all are appointed by the Central Government; total 9.
Add one line on Section 5(2) (whole-time and part-time) and one on Section 5(3) (qualifications).
If the question is a case, apply these lines to the facts and conclude.

Common mistakes in Composition of the Authority (Section 5)

Saying RBI, SEBI, IRDAI and PFRDA appoint their own Members.
The word 'nominated' is read as 'appointed'.
Fix: Write that the regulators nominate, but the Central Government appoints all Members under Section 5(1).
Leaving out PFRDA or listing only three regulators.
Students remember RBI, SEBI and IRDAI and forget the pension regulator.
Fix: Use the four-regulator list: RBI, SEBI, IRDAI, PFRDA.
Stating the wrong total, such as 7 or 10 Members.
The two Finance Ministry seats or the two independent seats are missed, or the Chairperson is counted twice.
Fix: Count by clause: 1 + 4 + 2 + 2 = 9.
Saying all Members are whole-time.
Section 5(2) is skipped.
Fix: State that only the Chairperson must be whole-time, and clause (d) Members may be whole-time or part-time.
Treating the two Finance Ministry Members as selected by the Selection Committee.
Clauses (c) and (d) both mention two Members and get mixed up.
Fix: Clause (c): nominated by the Central Government from Ministry officials, ex officio. Clause (d): appointed on the Selection Committee's recommendation.
Mixing up Section 5 with Section 6 or Section 22 details.
These sections sit close together in the Act.
Fix: Keep Section 5 for composition. Term of three years and age limits belong to Section 6. Supersession belongs to Section 22.

Worked examples

Example 1

Describe the composition of the International Financial Services Centres Authority under the IFSCA Act, 2019. State who appoints the Members and how many there are.

Show the solution

Provision: Section 5(1) of the IFSCA Act, 2019 provides that the Authority consists of Members appointed by the Central Government.
Category (a): a Chairperson.
Category (b): one Member each nominated by RBI, SEBI, IRDAI and PFRDA, ex officio. That is four Members.
Category (c): two Members from the officials of the Ministry dealing with Finance, nominated by the Central Government, ex officio.
Category (d): two other Members appointed by the Central Government on the recommendation of a Selection Committee.
Section 5(2): the Chairperson is a whole-time Member; clause (d) Members may be whole-time or part-time.
Count: 1 + 4 + 2 + 2 = 9.

Answer: The Authority has nine Members, all appointed by the Central Government: the Chairperson, four ex officio nominees of RBI, SEBI, IRDAI and PFRDA, two ex officio Finance Ministry officials, and two Members appointed on the Selection Committee's recommendation.

Example 2

The Central Government wishes to appoint Mr. Rao, a retired professor of economics with a reputation for integrity, as a part-time Member of the Authority on the Selection Committee's recommendation. Separately, SEBI wants to appoint its own nominee directly without involving the Central Government. Advise on both.

Show the solution

Provision: Section 5 of the IFSCA Act, 2019.
Mr. Rao: clause (d) allows two other Members to be appointed by the Central Government on the recommendation of a Selection Committee.
Section 5(2) allows clause (d) Members to be whole-time or part-time, as the Central Government deems fit. So a part-time appointment is permitted.
Section 5(3) requires ability, integrity and standing, with capacity in financial matters or special knowledge or experience of law, finance, economics, accountancy, administration or another useful discipline. Economics expertise and integrity satisfy this.
SEBI: clause (b)(ii) lets SEBI nominate one Member, ex officio, but Section 5(1) says all Members are appointed by the Central Government. SEBI cannot appoint directly.
Conclusion for each limb.

Answer: Mr. Rao can be appointed as a part-time Member under clause (d), provided the appointment follows the Selection Committee's recommendation and he meets Section 5(3). SEBI can only nominate its Member; the appointment must be made by the Central Government.

Exam tips

Write the structure as 1-4-2-2 and name every regulator. Marks are often lost on a missing PFRDA or a wrong total.
In case questions, state who appoints, who nominates and who recommends. Examiners test this distinction.
Quote Section 5(2) and 5(3) whenever the facts mention whole-time, part-time or a person's background.
Keep Section 5 (composition) separate from Section 6 (term, age, resignation) and Section 22 (supersession). Cross-refer briefly only when the facts need it.
Use the Act's words: 'ex officio', 'Selection Committee', 'Ministry dealing with Finance'.

Practice questions from IFSCA Ecosystem and Regulatory Framework

Composition of the Authority (Section 5) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA FinalIRDA Act 1999: Authority Composition and Functions

Composition of the Authority (Section 5): frequently asked questions

How many Members does the IFSCA have under Section 5?

Nine. These are the Chairperson, four nominees of RBI, SEBI, IRDAI and PFRDA, two officials of the Ministry dealing with Finance, and two Members appointed on the Selection Committee's recommendation.

Who appoints the Chairperson and Members of IFSCA?

The Central Government appoints all of them under Section 5(1). The regulators only nominate their Members, and the two independent Members are appointed on a Selection Committee's recommendation.

Are IFSCA Members whole-time or part-time?

Section 5(2) says the Chairperson shall be a whole-time Member. The two Members under clause (d) may be whole-time or part-time as the Central Government deems fit.

Who forms the Selection Committee under Section 5?

Section 5(4) says it consists of such Members, and is constituted in such manner, as may be prescribed. Section 27(2)(a) gives the Central Government the rule-making power for this.