Distribution of Capital Market Products and Services under the International Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 

The International Financial Services Centres Authority (hereinafter referred to as “IFSCA”) issued a circular vide which a framework for the distribution of capital market products and services has been specified. 

1. Some of the important Definitions provided are:
   a. Capital Market Products

“Securities” as defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 and includes similar instruments by whatever name called, issued or created by any issuer in IFSC, India or Foreign Jurisdictions, and such other instruments as may be specified by the Authority.

2. Capital Market Services 

Mean and include investment advisory services, portfolio management services, by whatever name called, provided by a service provider which is a regulated financial entity, and such other services as may be specified by the Authority.

2. Applicability and Obligation to seek Registration: 

For acting as a registered distributor by setting up operations in an IFSC, registration with the Authority is a mandatory obligation. 

3. Application for Registration: 

To obtain a certificate of registration, an application in the format as given in Part 1 of Schedule I of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 along with a fee has to be submitted. 

4. Net worth Requirements: 

A net worth of a minimum of USD 50,000 at all times has to be maintained by an entity seeking to register as a registered distributor. 

5. Permissible Activities that may be undertaken by a registered distributor: 
   a. Distribution of Capital Market Products and/or services to any client in IFSC or Foreign Jurisdiction 
   b. Distribution of Capital Market Products and/or services to sophisticated investors in IFSC or Foreign
   c. Jurisdiction Distribution of Capital Market Products and/or services to any client in India 
   d. Distribution of Capital Market Products and/or services to sophisticated investors in India
   e. Any other activities as may be specified by the Authority.

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