In a major move to bring more meaning to SEZs in India, the Reserve Bank of India has notified Foreign Exchange Management (International Financial Services Centre) Regulations 2015, according to which a financial institution or a branch thereof set up in the International Financial Services Centre (IFSC) and permitted or recognised as such by the government or a regulatory authority shall be treated as person resident outside India. According to RBI Circular issued on 31-3-2015, financial transaction in this context shall mean making or receiving payment, drawing, issuing or negotiating bills of exchange or promissory note, transferring any security or acknowledging any debt.
Simultaneously, similar guidelines have also been issued by SEBI on 27-3-2015, to facilitate and regulate financial services relating to securities market in an IFSC. It may be noted that any Indian recognised stock exchange or any stock exchange of a foreign jurisdiction is allowed to form a subsidiary to provide the services of stock exchange in IFSC. Further, in order to regulate insurance business in IFSCs, the Insurance Regulatory Development Authority of India (IRDAI) has also issued certain guidelines on 7-4-2015 according to which all Indian insurers are eligible to set up IFSC Insurance Office and an insurer registered with a foreign regulatory or supervisory authority will be permitted to set up such office based on certain criteria.