The Securities and Exchange Board of India (SEBI) announced on Friday that stock brokers can now engage in securities market activities at the International Financial Services Centre (IFSC) in GIFT City without needing prior approval. This move allows brokers to operate these activities under a separate business unit (SBU) within their existing entities, expanding their operational scope.
Broader flexibility is also offered, as activities can continue to be executed through an existing subsidiary or newly formed SBU. Regardless of the chosen structure, all operations at GIFT-IFSC will fall under the jurisdiction and regulatory framework of the appropriate authority, ensuring that activities adhere to stipulated guidelines.
To maintain transparency, brokers must keep IFSC-related activities distinct from their Indian operations. Separate accounts and net worth for IFSC activities must be maintained on an arms-length basis. Existing brokers with approved subsidiaries or joint ventures in GIFT-IFSC can opt to dissolve these structures and transition to in-house SBUs.
(With inputs from agencies.)
