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:

1. ##### Book-keeping
2. ##### Taxation services
3. ##### Accounting Services
4. ##### 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:

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• ##### 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:

1. ##### Splitting up an already existing business
2. ##### Reconstructing of an already existing business
3. ##### 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.

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