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CS Professional · IFSCA - Regulations, Listing and Compliances · International Financial Services Centres: An Introduction

Before 2020, several regulators had permitted certain financial products and institutions in an IFSC. After the IFSCA Act, 2019 became effective, Veda Securities, permitted earlier by a regulator, asks who now regulates it in the IFSC. Under the Act's functions of the Authority, what is the position?

The Authority regulates it. Section 12(2)(a) covers financial products, services and institutions in an IFSC that were permitted before commencement of the Act by any regulator for any IFSC, so the unified IFSCA takes over rather than the earlier regulator.

  1. AThe earlier regulator continues to regulate it, since the permission predates the Act
  2. BThe Authority regulates such products, services and institutions permitted before commencement by any regulator for any IFSCCorrect
  3. CThe Central Government regulates it directly without the Authority
  4. DIt becomes unregulated until fresh permission is obtained

Explanation

Section 12(2)(a) includes in the Authority's functions regulating financial products, services and institutions in an IFSC permitted before commencement by any regulator for any IFSC. So earlier permission does not keep the old regulator in charge, and no gap arises.

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