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CS Professional · IFSCA - Regulations, Listing and Compliances · Capital Market Intermediaries

Kiran Advisors, an applicant for registration as a capital market intermediary in GIFT IFSC, has a promoter against whom a recent order finds that the promoter is not fit and proper. How will IFSCA treat this under the eligibility framework?

The adverse finding weighs against the applicant. IFSCA assesses whether the applicant and its principal persons such as promoters and directors are fit and proper, and strong net worth cannot offset a failure on integrity. The test applies at the application stage, not only after registration.

  1. AFit and proper status is relevant only after registration is granted
  2. BIt is ignored if the applicant has high net worth
  3. CIt is relevant only for individual applicants, not companies
  4. DIt weighs against the applicant, since IFSCA considers fit and proper criteria of the applicant and its principal personsCorrect

Explanation

IFSCA grants registration only to applicants it finds fit and proper, which includes the integrity and standing of the applicant, its promoters, directors and key management. Net worth does not cure a fit and proper deficiency, and the test applies at application stage and afterwards.

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