The Securities and Exchange Board of India (SEBI), the capital markets regulator of the country, has added the International Financial Services Centres Authority (IFSCA) to its list of financial sector regulators, as stated in a circular issued by Sarika Kataria, Deputy General Manager of Debt and Hybrid Securities at SEBI.
This update follows a circular released on May 16, 2024, which permitted ESG rating providers to offer environmental, social, and governance (ESG) ratings of any product or issuer based on the requirements of other financial sector regulators or authorities, in line with their guidelines.
The circular states, “To enable ERPs (ESG rating providers) to undertake ESG rating activities in the International Financial Services Centre, Gujarat International Finance Tech-City (IFSC-GIFT City), the International Financial Services Centres Authority (IFSCA) is hereby added to the list of financial sector regulators and authorities as specified in Annexure 4 of the aforesaid Master Circular for ERPs.”
IFSCA is a statutory authority established by the Government of India to develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform for the entire region and the global economy.
Under the new regulations, ESG ratings conducted by an ERP according to IFSCA guidelines will fall under the domain of IFSCA. The IFSCA is authorised to address any issues arising from the activities of SEBI-registered ERPs in the Indian Financial System Code, as outlined in Sections 12 and 13 of the IFSCA Act.
Additionally, IFSCA will handle complaints and enforcement actions, and provide information to third parties, including statutory or judicial bodies, concerning the services provided by ERPs in the IFSC.
The regulations in the circular are to be effective immediately.