Sebi to set up first IFSC in Gujarat's GIFT City after Board approves guidelines

Paving the way for creation of the country's first International Financial Services Centre in Gujarat's GIFT City, the Securities and Exchange Board of India (Sebi) on Sunday approved a relaxed set of norms for setting up of stock exchanges and other capital market infrastructure in such centres.

Sebi Chairman UK Sinha said the new IFSC guidelines would help create vibrant capital market activities in such centres.

"Stock exchanges and clearing corporations would be provided concessions for setting up ventures in the IFSC. All existing exchanges would be allowed to set up their subsidiaries in the IFSC under the relaxed regimes," Sinha said after a Sebi Board meeting.

Finance Minister Arun Jaitley, who also addressed Sebi's board earlier on Sunday morning, had announced in the Budget in February that the country's first IFSC would be set up in Gujarat International Finance Tec-City (GIFT City) in Gujarat - which is one of the country's 100 proposed smart cities.

GIFT City would be the country's first IFSC, with which top bourses Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have already signed MoUs for setting up international exchanges there.

The move is expected to capture an estimated Rs 1,334 crore per day (or Rs 2 lakh crore per year) worth of trading in rupee derivatives that currently goes to locations outside the country.

Presenting the Union Budget for 2015-16, Jaitley had said that appropriate regulations for IFSCs would be issued in March, which would be on the lines of global financial centres of Singapore and Dubai.

"Even though India produces some of the finest financial minds, including in international finance, they have few avenues in India to fully exhibit and exploit their strength to the country's advantage," the Finance Minister had said.

Under the new regime, rules and regulations differ from those applicable outside these IFSCs.

"GIFT in Gujarat was envisaged as IFC (International Finance Centre) that would actually become as good an IFC as Singapore or Dubai, which, incidentally, are largely manned by Indians... The proposal has languished for years. I am glad to announce that the first phase of GIFT will soon become a reality. Appropriate regulations will be issued in March," Jaitley had said.

GIFT Company's MD & Group CEO Ramakant Jha said the new guidelines would provide a much-needed fillip to the new IFSC regime and it is a much needed step to save billions of dollars worth financial services business that the country is losing out to other global hubs.