Panel pitches for comprehensive regulatory regime to deal with various financial aspects in IFSC

Any other entity established overseas may also be permitted to set up a branch in IFSC only if it doesnt have any presence in India.The panel was constituted pursuant to the notification issued by the Ministry of Finance in January this year.The committee also emphasised the need for continuous training and development programmes for the workforce engaged in these services in GIFT IFSC.

An expert committee on developing GIFT IFSC as a 'Global Finance and Accounting Hub' has made a case for a comprehensive regulatory regime to deal with various aspects like bookkeeping, accounting and taxation.

The maiden International Financial Services Centre (IFSC) is located in the Multi-Service Special Economic Zone in GIFT City, Gujarat. It is being regulated by the IFSCA, which is a unified authority, for the development and regulation of financial products, financial services and financial institutions within IFSCs. The expert committee submitted its report to the Chairperson, of the International Financial Services Centre Authority (IFSCA), on March 26, the finance ministry said.

''The Committee proposes a new regulation, which provides for a comprehensive and inclusive definition for Bookkeeping, Accounting, Taxation, and Financial Crime Compliance Services,'' the report said.

As per a government notification, the business should not be set up by splitting up, reconstruction, or reorganisation of a business already in existence in India. ''As a primary safeguard, the Committee recommends that entities set up in IFSC to carry out bookkeeping, accounting, taxation, and financial crime compliance services should only be in the form of a company or a Limited Liability Partnership,'' the report said. Also, a branch of an Indian company or LLP may be permitted only if the entity is regulated by any of the three professional bodies - ICAI, ICSI or ICMAI, it is recommended. Any other entity established overseas may also be permitted to set up a branch in IFSC only if it doesn't have any presence in India.

The panel was constituted pursuant to the notification issued by the Ministry of Finance in January this year.

The committee also emphasised the need for continuous training and development programmes for the workforce engaged in these services in GIFT IFSC. The panel has also outlined some of the strategies that GIFT IFSC can adopt to promote and develop itself as a bookkeeping, accounting, taxation, and financial crime compliance hub.

The strategies include marketing, global partnerships, and a centre of excellence.

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