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The International Financial Services Centres Authority (IFSCA) on Monday directed all regulated entities operating in the International Financial Services Centre (IFSC) to ensure they hold valid and subsisting approvals at all times, warning of strict action for non-compliance.
In a circular issued on August 10, the authority said possessing a valid Letter of Approval (LoA) under the Special Economic Zones Act, 2005, is a prerequisite for obtaining any registration, licence, recognition or permission to undertake permissible activities in the IFSC.
The regulator noted that LoAs are valid for one year for entities that have not commenced operations and five years for those that have, with renewal applications required at least two months before expiry.
It also clarified that regulatory instruments granted to entities may either be perpetual or valid for a specified period.
The circular follows observations that certain entities were continuing business activities in the IFSC without holding valid LoAs or applicable regulatory instruments.
In response, IFSCA has mandated that all regulated entities must ensure continuous validity of both LoAs and regulatory approvals and refrain from undertaking any business activity without them.
The authority warned that any breach would constitute a violation of provisions under the IFSCA Act, 2019, the Special Economic Zones Act, 2005, and related rules, attracting enforcement action, including financial penalties, suspension or cancellation of approvals.
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