The government-controlled International Financial Services Centres Authority (IFSCA) issued a framework for fintech entities across the spectrum of banking, insurance, securities, and fund management in the International Financial Services Centres (IFSC).
The framework in furtherance of its mandate to develop and regulate financial products, financial services and financial institutions in the International Financial Services Centres (IFSC) and to encourage promotion of financial technologies (FinTech).
“The “Framework for FinTech Entity in the IFSCs” is aimed at giving boost to the establishment of a world class FinTech hub,” the authority said.
As per the new framework, there will be a dedicated Regulatory Sandbox for FinTech products or solutions namely IFSCA FinTech Regulatory Sandbox. The IFSCA has been empowered to grant Limited Use Authorisation within FinTech Regulatory Sandbox to the eligible financial technology entities in IFSC.
The entities would be able to avail Grants under the IFSCA FinTech Incentive Scheme 2022.
The framework also incorporates the Inter Operable Regulatory Sandbox (IoRS) mechanism which aims to facilitate testing of innovative hybrid financial products/services falling within the regulatory purview of more than one financial sector regulators.
It has been proposed to set up a Regulatory Referral mechanism which shall be governed as per the provisions of the Memorandum of Understanding (MoU) or collaboration or special arrangement between IFSCA and corresponding overseas Regulator(s).
(With inputs from PIB)