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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, in what currency must a transaction of financial services in an IFSC, such as the subscription of a debt issue, be carried out?

Every financial services transaction in an IFSC must be in the foreign currency specified by the regulations, made in consultation with the Central Government. So the parties cannot freely choose rupees or any currency; the denomination of a debt or equity issue follows what the regulations specify.

  1. AIndian rupees only, always
  2. BAny currency chosen by the parties without restriction
  3. CThe foreign currency specified by regulations in consultation with the Central GovernmentCorrect
  4. DThe currency of the issuer's home country

Explanation

Section 20 provides that every transaction of financial services in an IFSC shall 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, and issuer home currency is not the test.

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