IFSCA

Everywhere else in India, a financial firm answers to whichever regulator matches its business: a bank to the RBI, a broker or fund to SEBI, an insurer to IRDAI, a pension scheme to PFRDAI.

Inside the International Financial Services Centre, all four sets of powers sit with one body — the International Financial Services Centres Authority. A fund manager, an insurance broker and a banking unit in GIFT City are all licensed, supervised and penalised by the same regulator, under the same AML rulebook.

That is the single fact the rest of this paper hangs on.

The Government of India established IFSCA in April 2020 under the International Financial Services Centres Authority Act passed by Parliament. For the first time the regulatory powers of four Indian financial regulators — RBI, SEBI, IRDAI and PFRDAI — were vested in a single authority for one geography.

On anti-money laundering, IFSCA does not write its own law. It sits downstream of the PMLA and of the FATF Recommendations, and converts both into one rulebook for the units it licenses: the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022, which run to 12 chapters, from Applicability and Definitions through to Groups, Branches and Subsidiaries.

Supervision is both onsite and offsite, and the workbook's case chapter shows the onsite half means literal surprise visits to the office.

NEO Asset Management Private Limited (IFSC Branch) was registered by IFSCA as a Fund Management Entity in the Registered FME (Non-Retail) category on 22 November 2023, under registration number IFSCA/FME/II/2023-24/084.

IFSCA made surprise visits on 31 July 2024 and 21 August 2024. On both occasions the office was found with no Principal Officer and no Key Management Personnel present — people the Fund Management Regulations require to be based out of the IFSC.

IFSCA issued an Advisory Letter on 12 September 2024, giving the branch four weeks to have the premises open and staffed. The branch neither collected the physical copy nor replied to the email.

After the four weeks expired on 12 October 2024, IFSCA visited again on 17 October and 24 October 2024. Both times: empty.

The order, passed under Regulation 143 of the IFSCA (Fund Management) Regulations, 2022 read with Sections 12 and 13 of the IFSCA Act, 2019 and Section 11B of the SEBI Act, disposed of the proceedings with a Warning on Regulations 7(4) and 10(1), with repetition to be treated as a matter of serious concern.

Four surprise visits over three months, one advisory letter ignored, and the sanction was still a warning — but the warning is now on the public record and sets the baseline for the next inspection.

Chapter 1 (section 1.4.8, International Financial Services Centre) introduces IFSCA and names the four regulators whose powers it absorbed — an almost guaranteed factual question. Chapter 5 is the AML Guidelines themselves, and Chapter 6 closes with a comparison table of IFSCA against the other Indian regulators; the sample question there asks which statement is true of the IFSCA guidelines, and the answer is that they are tailored to the unique global nature of IFSC operations. Chapter 7 supplies the IFSCA adjudication orders.

• IFSCA was established in April 2020; GIFT IFSC was established in 2015. Five years of the centre operating before its own regulator existed. The two dates are asked separately.
• Four regulators, not three and not five — RBI, SEBI, IRDAI and PFRDAI. The question usually offers a list with one swapped out.
• IFSCA regulates the IFSC, not the rest of India. A firm with a GIFT City branch and an Indian head office is supervised by IFSCA for the branch and by its home regulator for everything else — which is exactly what tripped up Prowess Insurance Brokers.
• IFSCA is not the investigating agency. It licenses and adjudicates; money-laundering offences are investigated by the Directorate of Enforcement, and reporting failures are penalised by FIU-IND.
• The Guidelines are dated 2022, not 2020 — they came two years after the Authority.