Over two weeks after getting regulatory nod, Central Depository Services Ltd (CDSL) became the first depository to inaugurate a branch within the International Financial Services Center (IFSC) at Gujarat International Fin-Tec City (GIFT City).
According to Nehal Vora, managing director & CEO of CDSL, a branch within IFSC will now help in introducing products like depository receipts, masala bonds, exchange-traded funds (ETFs) along with hybrid products and similar delivery-based trading.
"This will help provide convenient, dependable and secure depository services. It will lead to more delivery based transactions. In last three years of its operation, GIFT City has seen $2.5-$3 billion of trades on two exchanges present here and there are only 50 brokers operating here," Vora added.
Allowing investors to deposit securities by opening an account in electronic form, CDSL earns revenue from transaction charges, account maintenance and settlement levy paid by depository participants.
Commenting on the branch's revenue contribution potential, Vora said, "Our intention is to provide important platform and build relevant infrastructure. It is like building a new road in an area which has a promise of good industrial investment."
Meanwhile, even as IFSC at GIFT City is set to get a unified regulator in a few months, Vora said that the current regulatory framework in the domestic region was also encouraging. "I think unified regulator would be more of a complementary to existing regulators. Framework is now more or less there and companies need to come and participate. However, initial assessment is that there is a positive interest," Vora added.