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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 Securities Ltd, a unit in GIFT City, underwrites the subscription of bonds issued by an Indian corporate listing on an IFSC exchange. Under the IFSCA Act, 2019, how is this activity classified, and what is the unit?

Underwriting is a financial service under the IFSCA Act, 2019, and a unit set up in an IFSC that renders such services is a financial institution. The bonds are the financial product, while the Authority and appropriate regulators are regulatory bodies, not service providers.

  1. AA financial service, and the unit is a financial institutionCorrect
  2. BA financial product, and the unit is a financial institution
  3. CA financial service, and the unit is the Authority
  4. DA financial product, and the unit is an appropriate regulator

Explanation

Underwriting the issuance or subscription of a financial product is listed as a financial service. A unit in an IFSC engaged in rendering financial services is a financial institution. The Authority and the appropriate regulator are regulators, not service units, and the bonds are the product, not the underwriting.

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