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CS Professional · IFSCA - Regulations, Listing and Compliances · Banking Services and Finance Companies in IFSC

Delta Trade Finance, registered in GIFT IFSC, buys export invoices of a Singapore exporter at a discount and collects from the overseas buyers. Which activity is this?

This is factoring, which a registered finance company in an IFSC may undertake. The company buys receivables at a discount and collects from the debtors; underwriting, portfolio management and insurance broking are unrelated services needing separate registrations.

  1. AFactoring, a permitted finance company activityCorrect
  2. BUnderwriting of securities
  3. CPortfolio management
  4. DInsurance broking

Explanation

Purchasing receivables at a discount and collecting them from debtors is factoring. Factoring and forfaiting are among the financing activities a registered finance company can undertake in an IFSC. Underwriting, portfolio management and insurance broking are different regulated services.

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