To attract more companies to set shop in the International Financial Services Centre (IFSC), a relaxed regulatory framework is released by the Central Government.
The first IFSC is being set up in Gujarat as part of a Special Economic Zone. Among others, any financial institution at the centre would be treated as a non-resident Indian entity located outside India.
Highlights of modification in IFSC Rules:
– A specified IFSC private company will only be limited by shares, according to the notification.
– All such companies have to suffix International Financial Services Centres or IFSC in their names.
– In case of a specified IFSC public company, which is a subsidiary of a foreign company, the financial year of the subsidiary may be same as the financial year of its holding company and approval of the tribunal shall not be required.
– Companies also have relaxation for filing their documents under the exemptions—the time given for submitting verification for registered addresses to the registrar of companies (ROC) for IFSC companies will be sixty days instead of thirty, filing copies of every resolution and agreement with the ROC can be done in sixty days.
– For IFSC companies, an officer or any other person authorized by the company can authenticate documents and other contracts (under the Companies Act, for all other companies, only an officer of the company can do so).
– IFSC companies can make private placement offers and will not be restricted by earlier offers which haven’t been completed or withdrawn.
– An extract of the annual return of the company will not have to be included in the board’s report. IFSC companies will not have to comply with the secretarial standards prescribed by the Institute of Company Secretaries of India.
– IFSC companies only need internal audit if their articles of association provide for the same.
– IFSC firms can make investments through more than two investment companies.
– Certain class of companies established in the IFSC would not required to seek approval from the National Company Law Tribunal (NCLT) for following a different financial year than the April-March period.
– Section 135, which pertains to CSR, would not be applicable to specified IFSC public company for five years.