ADI

Clarifications on Broker Dealer Global Access and Fees issued by IFSCA

OVERVIEW:


  • The International Financial Service Centres Authority (IFSCA) has released a significant circular concerning clarification regarding global access for broker dealers and the associated fees.
  • Issued on June 06, 2024 this circular talks about the clarifications provided by the IFSCA to ensure that broker dealers are clean on their obligations regarding global access
  • These measures aim to streamline processes while maintaining regulatory oversight and financial compliance within the IFSC framework

PERMITTED METHODS:

 
  • Cross Boarder Arrangement:
         Broker Dealers can access exchanges outside IFSC through a regulated entity in the other jurisdiction

  • Trading Membership:
         Broker dealers can register as a trading member of an exchange outside IFSC, provided they trade on their proprietary             account and do not engage in client dealings.
 

NO-OBJECTION REQUIREMENT:


  • Broker dealers must seek a ‘no-objection’ from recognized stock exchanges in the IFSC before availing global access.
  • Broker dealers doesn’t need an NOC if they use India INX Global Access IFSC Limited (India INX GA).

ANNUAL FEE FOR GLOBAL ACCESS:

 
  • USD 1,000 for broker dealers and subsidiaries of exchanges providing global access.
  • Broker dealers participating through India INX GA are not required to pay separate annual fees.
  • Fees to be paid pro rata from the date of NOC granted by the stock exchange

EFFECTIVE DATE AND AUTHORITY:


  • Effective Immediately:  This circular is effective from the date of issuance.
  • Issued Under:  Section 12 of the International Financial Services Centres Authority Act, 2019, and regulation 72 of the IFSCA (Capital Market Intermediaries) Regulations, 2021.

CONCLUSION:


  • By outlining the requirements for ‘no-objection’ certificates, the applicability of annual fees, and payment timelines, the circular ensures that broker dealers understand their regulatory and financial obligations.
  • These measures promote compliance and facilitate smoother operations for broker dealers within the IFSC framework, supporting a well-regulated and efficient financial ecosystem.

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