The International Financial Services Centres Authority (IFSCA) has recently garnered attention by becoming an associate member of the International Organization of Securities Commissions (IOSCO). This news comes with the Securities and Exchange Board of India (SEBI) already standing as an ordinary member of IOSCO.
Insight into the International Financial Services Centres Authority (IFSCA)
The IFSCA came to existence in April 2020, under the International Financial Services Centres Authority Act, 2019. GIFT, also known as Gujarat International Finance Tec-City located in Gandhinagar, Gujarat, acts as the headquarters of this unified authority. The IFSCA is tasked with the regulation and development of financial institutions, products and services in the International Financial Services Centre (IFSC) within India.
The IFSC tends to customers outside of domestic economy jurisdiction. It was instituted with an aim to promote ease in conducting business in IFSC and to provide a regulatory environment that matches global standards.
The primary objective of the IFSCA is to build a sturdy connection to the global market while focusing on the needs of the Indian economy. It also endeavors to serve as an international financial platform for both the regional and global economy.
International Organization of Securities Commissions (IOSCO): An Overview
In its inception year of 1983, IOSCO was established and is now situated in Madrid, Spain, with its Asia Pacific Hub based in Kuala Lumpur, Malaysia. Acting as a collective for the world’s securities regulators, IOSCO covers more than 95% of the world’s securities markets, thereby setting global standards for the securities sector.
IOSCO cooperates closely with the G20 and the Financial Stability Board (FSB) to formulate standards aiming at strengthening securities markets. The FSB, as an international entity, monitors and advises on the worldwide financial system. The IOSCO Objectives and Principles of Securities Regulation are deemed as key standards for robust financial systems by the FSB.
IOSCO’s enforcement extends to matters relating to the interpretation of International Financial Reporting Standards (IFRS). It maintains a confidential database of actions taken by member agencies. IFRS, being an accounting standard issued by the International Accounting Standards Board, aims at providing a standard accounting language for heightened transparency in financial information presentation.
Objectives of IOSCO
IOSCO strives to develop, implement, and promote internationally recognized and consistent regulation, oversight, and enforcement standards. These efforts are directed towards investor protection, maintaining transparent, efficient, and fair markets, and mitigating systemic risks.
The organization works towards enhancing investor protection and fostering confidence in securities markets integrity. This is achieved through information exchange fortification and cooperation in enforcing market misconduct and conducting supervision of markets and intermediaries.
IOSCO fosters global and regional experience sharing for market development, market infrastructure strengthening, and appropriate regulation implementation.
Implications of IFSCA’s Membership
IFSCA’s membership provides them with a platform for exchanging information on areas of shared interest at both the regional and global level. The IOSCO platform will allow the IFSCA to learn from other well-established financial centers’ regulatory experiences and best practices.
