CS Professional · IFSCA - Regulations, Listing and Compliances · Overview of FinTech and Service Providers in IFSC
Aarav Wealth Tech, an Indian start-up, plans to offer a digital platform in GIFT IFSC. The Company Secretary advises on the IFSCA fintech approach. Which advice is correct?
The correct advice is that the sandbox offers controlled testing with safeguards such as limits on customers and duration. Applicants must show genuine innovation and consumer protection measures. It does not waive all obligations, require prior listing, or permit unlimited scale without an exit plan.
- AThe sandbox is meant for innovative products where regulatory relaxations are needed, with safeguards such as limits on customers and duration, while the applicant must still show genuine innovation and consumer protection measuresCorrect
- BThe sandbox removes all obligations including anti-money laundering and customer protection
- CThe sandbox is open only to entities already listed on an exchange
- DThe sandbox allows unlimited customers without any exit plan
Explanation
Sandbox participation is conditional: the innovation must be genuine, testing is bounded by customer and time limits, and safeguards including consumer protection and financial crime compliance remain relevant. Removing all obligations or allowing unlimited scale defeats the controlled-environment purpose, and listing is not a prerequisite.
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