Central Government amends SEZ norms in respect of financial products, financial services or financial institutions in an International Financial Services Centre
Introduction:-
Department of Economic Affairs has issued a significant notification on February 28, 2024. This notification amends some sections of the Special Economic Zones Act 2005 and the Special Economic Zones Rules 2006 as specified in column number (2) of Table 1 and Table 2, shall apply with such modifications, as specified in column number (3) of the said Tables. The modifications seek to regulate the financial products, financial services or financial institutions, as the case may be, In exercise of the powers conferred by sub-section (1) of section 31 of the International Financial Services Centre Authority Act, 2019.
Table 1- Modifications in SEZ Act 2005:-
| 1. | In section 12, sub-section (7) shall be inserted:-
Notwithstanding anything contained in this section, in case any Units requiring recognition, registration, license or authorization by the International Financial Services Centre Authority established under sub-section (1) of section 4 of the International Financial Services Centre Authority Act, 2019, the powers and functions of the Development Commissioner under this section, except the powers conferred under sub-section (3), shall be discharged by an officer nominated by the International Financial Services Centre Authority to be designated as Administrator (IFSCA) |
| 2. | In section 13 (sub-section 2 – Clause (f):-
Provided that for a Unit requiring recognition, registration, license or authorization by the International Financial Services Centre Authority, the Chairperson of the Approval Committee under clause (a) of subsection (2) of section 13 shall be the Administrator (IFSCA).
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| 3.
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In section 15 (sub-sections 1, 2, and 9):-
Provided further that any person intending to set up a Unit, requiring recognition, registration, license or authorization by the International Financial Services Centre Authority, shall submit a proposal to the Administrator (IFSCA).
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| 4. | In section 15 (sub-section (2)(b):-
Provided that the Administrator (IFSCA) may, after approval of the proposal referred to in sub-section (3), grant the letter of approval to the person concerned to set up any Unit and undertake such operations, requiring recognition, registration, license or authorization by the IFSCA. Provided further that relevant information regarding such Units to share with the Administrator (IFSCA) with the Development Commissioner of the SEZ on a monthly basis or as may be required from time to time.
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Table 2 – Modifications in SEZ Rules 2006
| 1. | In Rule 17 (Sub-rule 1):-
Provided that, an application seeking permission for setting up a Unit requiring recognition, registration, license or authorization by the International Financial Services Centre Authority shall be made to the Administrator (IFSCA) in Form FA, and Form F shall not be applicable to such Unit.
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| 2. | New Form ‘FA’:-
A detailed application form is introduce for various approvals, including setting up units, IEC number allotment, land/office space allotment, and other necessary registrations. |
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