The International Financial Services Centers Authority (IFSCA) has had its foundation stone laid by the Prime Minister in GIFT City, Gandhinagar. Being conceptualized as an iconic structure, this new building is a reflection of the growing prominence and stature of GIFT-IFSC as a global leader in international financial centers. Alongside this development, the India International Bullion Exchange (IIBX), India’s first international bullion exchange situated in GIFT-IFSC, was launched with the NSE IFSC-SGX Connect.
Understanding Bullion Exchange
Bullion refers to physical gold and silver of high purity, often kept in the form of bars, ingots or coins. A bullion exchange is a market where buyers and sellers trade not just gold and silver but also related derivatives. The London Bullion Market is one of the primary global market trading platforms for these elements.
Digging into Details About IIBX
Announced during the Union Budget 2020 to simplify gold import by Indian jewellers, the India International Bullion Exchange (IIBX) facilitates efficient price discovery while ensuring responsible sourcing and quality. It is responsible for directly importing gold through IIBX and plays an important role in the financialisation of gold in India.
Significance of IIBX
IIBX empowers India, providing it with a significant place in the global bullion market while serving the global value chain with integrity and quality. By enabling India to be able to influence global bullion prices as a principal consumer, it serves as a testament to the Government of India’s commitment.
About GIFT City
Located in Gandhinagar, Gujarat, GIFT (Gujarat International Finance Tec-City) City is an integrated hub for financial and technology services, not just for India, but for the world. It houses India’s first International Financial Services Centre (IFSC) within its multi-service Special Economic Zone (SEZ) and includes an exclusive Domestic Tariff Area (DTA).
NSE IFSC-SGX Connect Explained
The NSE IFSC-SGX Connect is a framework between NSE’s subsidiary in GIFT IFSC and Singapore Exchange Limited (SGX). This connection ensures that all orders on NIFTY derivatives placed by members of the Singapore Exchange are routed and matched on the NSE-IFSC order matching and trading platform. It enhances liquidity in derivative markets at GIFT-IFSC and attracts international participants, creating a positive impact on the financial ecosystem in GIFT-IFSC.
International Financial Services Centres Authority in Detail
Established in April 2020 under the International Financial Services Centres Authority Act, 2019, the IFSCA is headquartered at GIFT City, Gandhinagar, in Gujarat. It has the authority to regulate all financial services, financial products, and Financial Institutions in an IFSC. Upon recommendation, it can also bring other financial products, financial services, and financial institutions under its regulation in the IFSCs.
Authority of the IFSCA
The IFSCA holds the power to execute functions that were earlier handled by the respective financial sector regulatory bodies, including the Reserve Bank of India, Securities and Exchange Board of India, IRDAI, and the Pension Fund and Regulatory Development Authority, within the IFSCs. This exercise of authority is limited to the regulatory oversight over financial products, financial services, and financial institutions permitted in the IFSC.
IFSCA Processes and Procedures
The processes and procedures followed by the IFSCA are governed in accordance with the provisions of the respective Acts of Parliament of India. These acts pertain to financial products, services, or institutions under consideration, ensuring effective, law-abiding regulation. The Central Government can also grant funds to the Authority for fulfilling its function.
Transactions in Foreign Currency in IFSCs
The transactions of financial services in the IFSCs are carried out in foreign currency, as specified by the IFSCA Authority in consultation with the Central Govt.
