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Economy
Mahesh

28/04/22 22:38 PM IST

Framework for FinTech Entity in the IFSCs

In News 
  • 'The International Financial Services Centres Authority (IFSCA), in furtherance of its mandate to develop and regulate financial products, financial services and financial institutions in the International Financial Services Centres (IFSC) and to encourage promotion of financial technologies (‘FinTech’) across the spectrum of banking, insurance, securities, and fund management in IFSC has issued a detailed “Framework for FinTech Entity in the IFSCs”.'
About the Framework 
  • AIM - at giving boost to the establishment of a world class FinTech Hub at GIFT IFSC comparable with other International Financial Centers (IFCs).
  • The framework proposes to cover (i) financial technology (FinTech) solutions resulting in new business models, applications, process or products in areas/activities linked to financial services regulated by IFSCA and (ii) advanced/innovative technological solutions which aid and assist activities in relation to financial products, financial services and financial institutions (TechFin).
  • The framework provides for a dedicated Regulatory Sandbox for FinTech products or solutions namely IFSCA FinTech Regulatory Sandbox and empowers IFSCA to grant Limited Use Authorization within FinTech Regulatory Sandbox to the eligible financial technology entities in IFSC.
  • This would enable them to apply and avail Grants under the IFSCA FinTech Incentive Scheme 2022.
  • The framework also incorporates the Inter Operable Regulatory Sandbox (IoRS) mechanism. 
  • IoRS is a proposed mechanism to facilitate testing of innovative hybrid financial products / services falling within the regulatory ambit of more than one financial sector regulators.
  • IFSCA will facilitate Indian FinTech’s seeking access to foreign markets and foreign FinTech’s seeking entry into India.   
  • The framework proposes a Regulatory Referral mechanism which shall be governed as per the provisions of the Memorandum of Understanding (MoU) or collaboration or special arrangement between IFSCA and corresponding overseas Regulator(s).
Source-PIB 

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