Amendments and additions to IFSCA Banking Handbook and other issues

International Financial Services Centres Authority F.No.110/IFSCA/Banking Regulation/2021-22/9 November 12 , 2021 To, All IFSC Banking Units Dear Sir/Madam, Amendments and additions to IFSCA Banking Handbook and other issues IFSC Banking units (IBUs) may refer to circular F.No.110/IFSCA/Banking Regulation/2021- 22/ 6 dated August 13, 2021 on the issuance of IFSCA Banking Handbook. 2. Based on the feedback received from IBUs certain amendments/additions have been carried out to the contents of the Handbook. The list of such amendments/additions is enclosed in the annexure to this circular. 3. The following new modules have been added to the Handbook: a. FX Prime Brokerage – inserted as a Module of the Conduct of Business Handbook b. Undertaking Business in Foreign Currency - inserted as Module of the Conduct of Business Handbook. 4. IBUs may note that the provisions of the circulars issued by the Reserve Bank of India (RBI) and adopted by IFSCA vide its circular F.No.110/IFSCA/Banking Regulation/2020- 21/1 dated December 4, 2020 shall cease to be applicable to the operations of the IBUs from the date of coming into effect of the directions in the Handbook i.e., January 1, 2022. A circular formally withdrawing the RBI circulars adopted by IFSCA shall be issued on December 31, 2021. 5. Further, provisions of the circulars pertaining to IBUs issued by the Authority has been duly incorporated in the Handbook and these circulars shall cease to be applicable from the date of coming into effect of the directions in the Handbook i.e., January 1,2022. A circular formally withdrawing the circulars issued by IFSCA shall be issued on December 31, 2021. 6. IBUs are directed to ensure compliance to the directions this circular. Yours faithfully, Kamlesh Sharma Supriyo Bhattacharjee General Manager General Manager kamlesh.sharma27@ifsca.gov.in supriyo.b@ifsca.gov.in Annexure List of amendments/additions to provisions under the IFSCA Banking Handbook GENERAL DIRECTIONS S.N. Module No. Module Name Section Amendment/addition 1. 1 LIBU 1 (iii) Requirement of license – for setting up Representative Offices (ROs) 2. 1 LIBU 4 Transitional Provisions 3. 2 GOV 2 (c) Definition of the Governing Body 4. 2 GOV 8 Staffing 5. 3 CODF 3 (i) (a) (i), 3 (c), 4 (i) (a) (i) Insertion of the term –‘ Head-IBU’ 6. 3 CODF footnote no. 7 & 8 Application fee for approved individual 7. 3 CODF Annex Application for Approved Individual Status in an IBU to exercise controlled functions. 8. 5 SYSCO 3 (ii) Outsourcing 9. 5. SYSCO 5 (ii) (b) Record Keeping 10. 6 SUP 2 (iv) & (v) Powers of Supervision over IBUs and Banking business in IFSC CONDUCT OF BUSINESS DIRECTIONS S.N. Module No. Module Name Section Amendment/addition 1. 1 ACBU 2 (iii) Definition of ‘Client’ 2. 1 ACBU Footnote no. 1 Permitted activities 3. 1 ACBU 4 (xi) Acting as a Portfolio Manager 4. 1 ACBU 4 (xii) Providing Investment Advisory Services 5. 1 ACBU 4 (xiv) Bullion trading member and clearing member in GIFT IFSC 6. 1 ACBU 4 (xvii) Acting as FX Prime Brokerage 7. 1 ACBU 4 (xviii) Undertaking remittances 8. 1 ACBU 4 (xxvi) Operating as an Investment Banker 9. 1 ACBU 4 (xxvii) Undertake transfer of loan assets 10. 1 ACBU 4 (xxviii) Undertake negotiation of letter of credit of constituents 11. 2 BIFC New module introduced Undertaking business in foreign currency 12. 4 COMFP 2 Definition of ‘Financial Promotion’ 13. 7 OEOH 4 Transaction at off-market rates 14. 11 ACDE 4 (i), (iii) & (iv) Interest rate framework and other requirements 15. 12 REPO 6 (v) Activities of ROs 16. 12 REPO 8 (i) (ii) (iii) (v) & (vii) Administration 17. 13 OTDE 1 (iii) , 3 (ii) & (iii), 5 (d), 18 (ii) & Annex 2- section 4 OTC derivatives on Indian Government Bonds (IGBs) and State Development Loans (SDLs) 18. 13 OTDE 9 (ii) Exchange of margin 19. 13 OTDE 2, 7, 9, 16 The currency for expression of various limits changed from USD to Euro – in line with the guidelines of BIS and FSB 20. 14 FXPB New module introduced FX Prime brokerage 21. 16 PRCR 3 (iv) General condition on providing credit PRUDENTIAL DIRECTIONS S.N. Module No. Module Name Page No. Amendment/addition 1 1 GENPRU 7. Guidance note on stress testing at IBU level 2 3 PRDS 14 Guidance note on public disclosure of IBU’s financial statement.