SEBI Chief Ajay Tyagi said that the market regulator would issue operating guidelines to encourage registered investment advisors (RIAs) and portfolio management services (PMSs) to set up their businesses in international financial services centre (IFSC). He said this at the seminar on “GIFT IFSC: Onshoring the Offshore”.
Tyagi said, “There are other fund management related services such as investment advisers and portfolio management services which can provide a significant boost to onshoring the fund management industry in India. A priority area for SEBI is to issue operating guidelines for both these activities. With respect to the operating guidelines that SEBI had issued for AIFs, a consultative approach was adopted with GIFT City and other stakeholders. On similar lines, with respect to investment advisers, SEBI and GIFT City are already in advanced discussion stage for issue of operational guidelines for provision of such services in the IFSC. On portfolio management services, we are awaiting a proposal from GIFT City. Once these guidelines are issued, it would encourage onshoring of advisory and portfolio management services into India.”
Earlier, SEBI had allowed RIAs and PMSs to provide their services in IFSC. However, IFSC is yet to see participation from RIAs and PMS due to lack of clarity in taxation, regulations and so on. The operating guidelines from SEBI may encourage RIAs and PMSs to set up their businesses in IFSC.
An IFSC is exempted from certain domestic laws; instead, they follow international practices. IFSCs deals with flows of finance, financial products and services across borders. Companies setting up offices in IFSCs cannot deal in local currency. In addition, IFSCs can provide fund raising services for individuals, corporations and governments and wealth management services to foreign investors. In India, Gandhinagar has one IFSC called Gujarat International Finance Tec-City (GIFT).