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PIB 13th December 2020

Contents

  1. International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020

INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (BULLION EXCHANGE) REGULATIONS, 2020

Focus: GS 3 ;Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Why in News?

IFSCA notifies International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020.

About International Financial Services Centres Authority(Bullion Exchange) Regulations, 2020

  • In the Union Budget 2020, Union Minister of Finance had made an announcement for setting up an International Bullion Exchange at the International Financial Services Centre in GIFT City, Gandhinagar, Gujarat.
  • Subsequently, the Government of India had notified the bullion spot delivery contract and bullion depository receipt (with bullion as underlying) as Financial Products and related services as Financial Services under the International Financial Services Centres Authority (IFSCA) Act, 2019.
  • The IFSCA has been entrusted with the responsibility of operationalization of this Exchange.
  • In this regard, International Financial Services Centres Authority (Bullion Exchange) Regulations 2020 were approved by the Authority in its meeting held on October 27,2020. The said regulations have been notified and published in the Gazette of India on December 11, 2020.
  • The regulations inter alia cover the Bullion Exchange, Clearing Corporation, Depository and Vaults.
  • The regulations are divided into the 16 chapters. First half of the regulation deals with the Exchange and Clearing Corporations while the second half pertains to the Vaults and Depositories and related provisions.

About Bullion Market

  • A bullion market is a market through which buyers and sellers trade gold and silver as well as associated derivatives.
  • The London Bullion Market is known as the primary global bullion market trading platform for gold and silver.

About International Financial Services Centres Authority (IFSCA)

  • The International Financial Services Centres Authority (IFSCA) has been established on April 27, 2020 under the International Financial Services Centres Authority Act, 2019.
  • It is headquartered at GIFT City, Gandhinagar in Gujarat.
  • The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India.
  • At present, the GIFT IFSC is the maiden international financial services centre in India. Prior to the establishment of IFSCA, the domestic financial regulators, namely, RBI, SEBI, PFRDA and IRDAI regulated the business in IFSC.
  • As the dynamic nature of business in the IFSCs requires a high degree of inter-regulatory coordination within the financial sector, the IFSCA has been established as a unified regulator with a holistic vision in order to promote ease of doing business in IFSC and provide world class regulatory environment.
  • The main objective of the IFSCA is to develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform for the entire region and the global economy as a whole.

About  Services the IFSCA Provides

  • The Fund-raising services for individuals, corporations and governments.
  • The Asset management and global portfolio diversification undertaken by pension funds, insurance companies and mutual funds.
  • The Wealth management.
  • The Global tax management and cross-border tax liability optimization, which provides a business opportunity for financial intermediaries, accountants and law firms.
  • The Global and regional corporate treasury management operations that involve fund-raising, liquidity investment and management and asset-liability matching.
  • The Risk management operations such as insurance and reinsurance.
  • The Merger and acquisition activities among trans-national corporations.
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