International Financial Services Centres Authority vide Notification No. IFSCA/GN/2024/012 dated 18th November, 2024 notified International Financial Services Centres Authority (Registration of Factors and Registration of Assignment of Receivables) Regulations, 2024.

These regulations aim to provide for the manner of granting certificate of registration to Factors and filing of particulars of transactions with the Central Registry by a Trade Receivable Discounting System (TReDS) on behalf of the Factors under sub-section (1A) of section 19 of the Factoring Regulation Act, 2011 (12 of 2012).

Registration/ License- To be obtained prior to commence factoring business in International Financial Services Centre under;

1. International Financial Services Centres Authority (Registration of Factors and Registration of Assignment of Receivables) Regulations, 2024.
2. International Financial Services Centres Authority (Finance Company) Regulations, 2021. 

Conditions of license:

1. Relevant Persons of the Factor to possess adequate experience in the business of factoring.
2. Factor to either possess necessary infrastructure including adequate office space, equipment, communication facilities and manpower to undertake the business of factoring or willing and able to invest in the same.
3. Factor and Relevant Persons to satisfy ‘fit and proper’ requirements.
4. Factor to be financially sound.
5. Factor and Relevant Persons not to be subject to judicial proceeding for breach of any law.

List of Information to be submitted to Authority by Factors:

1. Assignment of trade receivables to be filed through Trade Receivables Discounting System (TReDS) in Form-I with Central Registry within ten days from date of assignment in case of trade receivables financed through a Trade Receivables Discounting System.
2. Satisfaction of assignment of receivables fully realised to be filed through Trade Receivables Discounting System (TReDS) in Form-ll with Central Registry within ten days from date of satisfaction in case of trade receivables financed through a Trade Receivables Discounting System.
3. Factor and eligible entities other than Factors to furnish information of their operations in manner, interval and form within such time as specified by International Financial Services Centres Authority.

Other Compliances to be complied with by Factor:

Factor to commence factoring business within six months from date of grant of certificate of registration.

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CS Archana Gupta