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

Under the IFSCA Act, 2019, every transaction of financial services in an International Financial Services Centre (IFSC) must be carried out in which currency?

Transactions of financial services in an IFSC must be in the foreign currency specified by regulations, made in consultation with the Central Government. The Act does not allow rupee-only dealing or free choice of currency, which is why securities listed on IFSC exchanges trade in specified foreign currency.

  1. AIndian rupees only, as the IFSC is located in India
  2. BSuch foreign currency as may be specified by regulations in consultation with the Central GovernmentCorrect
  3. CAny currency chosen freely by the contracting parties
  4. DThe home currency of the issuer's country of incorporation

Explanation

Section 20 requires every transaction of financial services in an IFSC to be in such foreign currency as may be specified by regulations, in consultation with the Central Government. Rupee-only or free-choice options contradict this. So a company listing securities on an IFSC exchange deals in the specified foreign currency.

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