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CS Professional · Strategic Management and Corporate Finance · An Overview on Listing and Issuance of Securities in International Financial Services Centre

Meridian Infra Ltd plans to list bonds on an exchange in GIFT City IFSC. For the purposes of the IFSCA Act, 2019, how are the bonds to be classified?

The bonds are a financial product, because the Act's definition of financial product expressly includes securities. Dealing in them, such as buying, selling or subscribing, is the financial service, and a unit providing it is the financial institution. No separate notification is required for securities.

  1. AA financial service, because they involve subscription
  2. BA financial institution, because the issuer is a unit
  3. CA financial product, because securities fall within that definitionCorrect
  4. DNeither, unless the Central Government notifies them separately

Explanation

The Act's definition of financial product begins with securities. Bonds are securities, so they are financial products. Buying, selling or subscribing to them is the financial service, and a unit rendering that service is a financial institution. No separate notification is needed for securities.

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