IFSCA added to list of regulators for credit rating agencies, ESP rating providers

The provisions under the circulars will come be applicable with immediate effect

International Financial Services Centres Authority (IFSCA) has been added to the list of regulators for ESP Rating Providers (ERPs) and Credit Rating Agencies (CRAs).

This has been done to enable ERPs and CRAs to operate under IFSCs.

In two circulars issued on July 19, the Securities and Exchange Board of India stated any issue arising from the activities of SEBI-registered ERPs and CRAs in the IFSC will be be dealt with by IFSCA under the powers exercisable under Section 12 and 13 of IFSCA Act and regulations and subsidiary instructions made thereunder.

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The circulars stated that IFSCA will be responsible for dealing with complaints, enforcement actions and furnishing information to third parties, including statutory or judicial bodies, in respect to the services provided by the ERPs and CRAs in the IFSC.

The circular will come into effect with immediate effect.

Section 12 of the IFSCA Act deals with the functions of the authority.

It states: (1) Subject to the provisions of this Act, it shall be the duty of the Authority to develop and regulate the financial products, financial services and financial institutions in the International Financial Services Centres, by such measures as it deems fit.

(2) Without prejudice to the generality of the provisions in sub-section (1), the powers and functions of the Authority shall include--

(a) regulating the financial products, financial services and financial institutions in an International Financial Services Centre which have been permitted, before the commencement of this Act, by any regulator for any International Financial Services Centre;

(b) regulating such other financial products, financial services or financial institutions in the International Financial Services Centres as may be notified by the Central Government from time to time;

(c) recommending to the Central Government such other financial products, financial services and financial institutions which may be permitted in an International Financial Services Centre by the Central Government;

(d) perform such other functions as may be prescribed.

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Section 13 deals with the powers of authority with regard to the financial products, services and institutions. Under this, the authority can recognise and registration of these; and can inspect, investigate, prosecute an entity or settle the proceedings; and can determine the settlement, among other things.