Financial Services Centre
About Gift SEZ at Gift City
Gujarat International Finance Tech-city (GIFT) SEZ is India’s first International Financial Services Centre (IFSC) under Special Economic Zone Act, 2005 (“SEZ Act 2005”). It is being developed as a global financial services hub. It is the vision of the Hon’ble Prime Minister that GIFT IFSC emerges as a hub for international financial services activities.
GIFT IFSC is India’s offshore jurisdiction and caters to the needs of international investors and fund raisers. Entities located at IFSC are offshore entities
Services available
- Multi-speciality Special Economic Zone
- Smart city with state of the art infrastructure, utility services
- Financial services on offer viz. –
- Fund raising in foreign currency
- Asset and wealth management
- Broking operations
- Global tax management
- Corporate treasury operations
- Risk management
- M&A among MNCs
- Dispute resolution is through International Arbitration Centre in IFSC
Prime Ministers Vision
“My vision is that in ten years from now, Gift city should become the price setter for at least a few of the largest traded instruments in the world, whether in commodities, currencies, equities, interest rates or any other financial instrument”“…Companies from Asia, Africa and Europe should be able to raise funds from this important International Finance Centre”– P.M. Narendra Modi on 9 th Jan, 2017 at inauguration of India INX
WHY GIFT IFSC
Attractive Tax Benefits for all with clear policies
- NO Security Transaction Tax (STT)
- NO Commodity Transaction Tax (CTT)
- NO GST on dollar denominated services procured or offered internationally
- NO Capital Gains Tax across asset class (Derivatives, Bonds, DRs) for non-residents and Category III AIFs at IFSC of which all units are held by non-residents
- NO Stamp duty
Cost Competitiveness for trading on exchanges
- All transactions traded and settled in USD , no currency risk and no FX conversion costs
- Efficient collateral utilisation – single segment – Derivatives
- No levies and charges from exchanges
- Eligible foreign securities accepted as collaterals
- Competitive margins as compared to other International exchanges like Singapore and Dubai
- Faster inward and outward remittances
Ease for Investors
- Market Access
- Direct access for Foreign portfolio investors, Eligible foreign investors, Non-resident Indians
- Trading in Omnibus form- Regulator approved Segregated Nominee Account Structure provides for KYC as per applicable PMLA and KYC requirements in investors jurisdiction
- Introduction through Authorised Persons appointed by SSIL
- Direct access for Foreign portfolio investors, Eligible foreign investors, Non-resident Indians
- On-Boarding and Documentation
- Simplified on-boarding process
- Maintaining Bank Account not mandatory
- Income Tax Registration Number not mandatory for foreign investors
- Investments
- Trading opportunities for upto 22 hours a day with international holiday calendar
- Co-location and Direct Market Access
- Diverse product offerings at GIFT IFSC
- Arbitrage across exchanges at IFSC and globally
- Benefit from Incentive schemes offered by exchanges
Risk Management at Clearing Corporations
- Minimum Networth requirements prescribed for members
- Minimum Liquid Networth Requirements to be adhered to by members at all times
- Initial Margins based on the SPAN Method
- Exposure Margins for extreme market movements
- Risk reduction mode for prescribed threshold limits
- Default Fund as per regulatory requirements
Infrastructure
GIFT IFSC is a Multi Services Special Economic Zone with 105 hectors of land and commenced its business in April 2015. As a jurisdiction, it offers latest technology and global best practices in infrastructure service delivery. At Gift IFSC, the infrastructure provides for all amenities ranging from basics like Potable water from any Tap, recycling of waste water to be used for landscape irrigation, Dual power supply at Power Station with building level Back-up power facility and state of the art telecommunication technology built around optical fibre ring infrastructure..
Regulators
The SEBI ( Internationl Financial Services Centres) Guidelines 2015 laid down the guidelines to facilitate and regulate financial services relating to securities market in an International Financial Services Centre. Link SEBI | SEBI (International Financial Services Centres) Guidelines, 2015. In addition, the Reserve Bank of India laid down the guidelines for banks to open International Banking Units (IBU) at GIFT IFSC while the IRDA prescribed the guidelines for insurance companies.
Considering that the dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination, need for clarifications and frequent amendments in the existing regulations governing financial activities in IFSC there was a need to have a uninified financial regulator for IFSCs in India to provide world class regulatory environment to financial market participants. This would also facilitate ease of doing business at IFSC as the unified authority would also provide the impetus to further the development of IFSC in-sync with the global best practices
The Government of India on December 20, 2019, notified the setting up of THE INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY ACT, 2019 to provide for the establishment of an Authority to develop and regulate the financial services market in the International Financial Services Centres in India and for matters connected therewith or incidental thereto.
The authority will regulate financial products such as securities, deposits or contracts of insurance, financial services, and financial institutions which have been previously approved by any appropriate regulator in an IFSC.
International Exchanges and Clearing Corporations
GIFT IFSC, as India’ offshore jurisdiction currently houses two international exchanges and their respective Clearing Corporations i.e
Exchanges
- India International Exchange (IFSC) Limited (India INX) is India’s first international exchange in International Financial Services Centre (IFSC) located at the Gujarat International Finance-Tec City (GIFT City). India INX is a subsidiary of BSE Limited.
- NSE IFSC Limited(NSE International Exchange) is a fully owned subsidiary company of National Stock Exchange of India Limited (NSE) and an international exchange in Gujarat International Finance Tech City (GIFT) – International Financial Service Centre (IFSC) Gandhinagar.
Clearing Corporations
- India International Clearing Corporation (IFSC) Limited (India ICC), a AAA rated clearing corporation, is a Securities and Exchange Board of India (SEBI) recognised Qualified Central Counter Party (QCCP), providing clearing & settlement and risk management services.
- NSE IFSC Clearing Corporation Limited (NICCL) is a fully owned subsidiary of NSE Clearing Limited (formerly known as National Securities Clearing Corporation Limited). NICCL provides counter-party guarantee for the trades executed on NSE IFSC Ltd. to ensure efficient clearing and settlement for trades. It has also put in place a comprehensive risk management framework to eliminate or mitigate risks.
Product Offering
Equity Index Derivatives
Commodity derivatives
Currency Derivatives
India Single Stock Futures
Debt securities
Equity Index Derivatives
Commodity derivatives
Currency Derivatives
India Single Stock Futures
Debt securities
Contract Specifications : as per Link to exchange
Financial Market Intermediaries
GIFT IFSC as a jurisdiction, offers an entire eco-system to meet the needs of investors and market participants. A unified regulator in the INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY to regulate all aspects be it banking, securities markets, insurance sector and the pension sector will facilitate ease for investors and market participants. Besides the two international stock exchanges and their respective clearing corporations , the jurisdiction has over 14 banks operating of which 7 banks also act as Settlement Banks for the Clearing Corporations. To complete the eco system, there are about 100 entities that have sought registrations to offer stock broking services.
The regulations also provide for set up of fund structures, offering investment advisory services, Portfolio management services.
Eligible Investors
In accordance with the SEBI IFSC Guidelines 2015 , Any intermediary permitted by the SEBI for operating within the IFSC shall provide financial services to the following categories of Clients:
(i) a person not resident in India;
(ii) a non-resident Indian;
(iii) a financial institution resident in India who is eligible under FEMA to invest funds offshore, to the extent of outward investment permitted;
(iv) a person resident in India who is eligible under FEMA, to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme of Reserve Bank of India, subject to a minimum investment as specified by the Board from time to time:
Provided that clients referred to in clauses (ii) to (iv) may be provided services, subject to guidelines of Reserve Bank of India.
Thus, Foreign Portfolio Investors registered in India, Eligible Foreign Investors and Non- resident Indians are currently allowed to invest at GIFT IFSC. When permitted, Resident Indians can also invest under the Liberalised Remittance Scheme.