IFSCA (BATF) Regulations, 2024
OVERVIEW:
On June 6, 2024 the International Financial Services Centres Authority notified the International Financial Services Centres Authority (Book- keeping, Accounting, Taxation and Financial Crime Compliance Services Regulations, 2024.
The regulations aim to establish a regulatory framework for developing, registering, and operating Book- Keeping, Accounting, Taxation and Financial Crime Compliance Services from International Financial Service Centres.
The key aspects of IFSCA BATF Regulations are as below:
SCOPE OF THE SERVICES:
The regulations cover:
Book-keeping
Taxation services
Accounting Services
Financial crime compliance services
NEW APPLICATION:
To register as a BATF service provider, entities must submit an application to IFSCA< applicant can be in form of a Company or Limited Liability Partnerships (LLPs).
Additionally, the promoters of the applicant entity cannot be from a jurisdiction identified by the Financial Action Task (FATF) as a “High- Risk Jurisdiction- subject to call for action”
REGISTERATION OF BATF:
No person except existing Ancillary Services Providers(ASP) can provide BATF services in IFSCs without obtaining a certificate of registration from IFSCA.
Ancillary providers have 60 days to communicate willingness to operate under these regulations.
ASP will also have to ensure compliance of safeguarding conditions
ROBUST FIT AND PROPER CRITERIA:
The regulation ensure that only fit and proper entities and individuals are allowed to operate.
This includes stringent criteria on financial integrity, good reputation, absence of convictions/disciplinary actions against promoters, directors/partners, and key personnel.
SERVICE RECIPIENT:
BATF service providers can only cater to non-resident entities not from high-risk jurisdictions identified by FATF(Services can be catered to other than BFSI as well).
This safeguards against migration of existing domestic operations.
QUALIFIED KEY PERSONNEL:
BATF entities to appoint a Principal Officer and Compliance officer, both based in IFSC meeting experience and qualified criteria like CA, CS, CMA, CPA, CFA or other relevant degrees/certifications.
MINIMUM OFFICE SPACE:
To ensure substantive operations, a minimum office space of 60sq. ft per employee is mandated.
SAFEGUARDS AGAINST MIGRATION:
Applicant will ensure that the business is not set up either by:
Splitting up an already existing business
Reconstructing of an already existing business
Reorganizing an already existing business.
BATF should not provide services by way of transferring or receiving of existing contracts or work arrangements from their Group Entities in India.
RESPONSIBILITIES:
The Principal Officer, designated by the BATF Service Provider, will be responsible for overall activities in IFSC.
A Compliance Officer will be designated by the BATF Service Provider who will be responsible for reporting to the Board of Directors or head of the Organization.
CONCLUSION:
The IFSC(Book-keeping, Accounting, Taxation and Financial Crime Compliance Service) Regulations 2024, established a rigorous framework for entities at GIFT IFSC.
By implementing strict application criteria, ensuring only fit and proper service providers, and imposing safeguards against the migration of domestic operations, these regulations enhance the integrity and security of financial services.
With specific requirements for qualified personnel, office space and compliance, the framework aims to create a transparent and efficient financial environment.
The initiative opens significant opportunities for companies and professionals, reinforcing GIFT IFSC’s position as a leading global financial hub.
