SEBI has allowed asset managers to offer portfolio management services at the international financial services centre (IFSC).
However, the portfolio managers will have to ensure that they maintain a minimum net worth of $7.50 lakh. Such fund managers will have to accept a minimum of $70,000.
This announcement is a part of SEBI's recent circular that details operating guidelines for PMS at 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, Gujarat International Finance Tec-City (GIFT).
Who can apply to offer PMS in IFSC?
Any SEBI-registered intermediary (on its own or in collaboration with its international associates) can provide PMS in IFSC by setting up a branch in IFSC. However, SEBI registered trading members or clearing members, cannot apply for PMS business in IFSC.
Other entities such as corporate or LLP based in India or in a foreign jurisdiction may form a company or LLP to provide PMS in IFSC. However, the formation of a separate company or LLP shall not be applicable in case the applicant is already a company or LLP in IFSC.
SEBI said such guidelines are put in place based on the representations received from various stakeholders.
