The Securities and Exchange Board of India (Sebi) is set to ease norms for merchant bankers looking to establish their presence at the GIFT City's International Financial Services Centre (IFSC). According to sources, the regulator plans to waive certain approval requirements for banks to facilitate their entry into the emerging financial hub.
Sebi is likely to do away with the rule that mandates domestic investment banks to obtain a no-objection certificate (NOC) for branching out at GIFT IFSC. The market regulator is expected to issue a notification shortly, outlining the revised registration process and guidelines, sources said.
“There is a requirement of NOC from Sebi for a merchant banker to expand to GIFT City. There are only four registered there. We believe the expected relaxation from the market regulator will help expand the base, specifically at a time when the GIFT City is gearing up for new listings,” said a source privy to the development.
According to sources, Sebi and the IFSC regulator have held successful discussions to streamline the registration process for merchant bankers.
“We are awaiting the final notification. It will clarify the process to be followed and help merchant bankers explore the options here,” said an official.
Also Read
Emailed queries sent to Sebi and IFSCA remained unanswered till the time of going to press.
As of September 2024, ICICI Bank and HSBC had their branches set up and authorised for investment banking in the GIFT-IFSC. Pantomath Global Financial Services and SPEC Finance have also registered at the IFSC.
The GIFT city regulator is also in the process of floating a consultation paper to further ease the requirements under the Capital Market Intermediaries Regulations, said people aware of the development.
These regulations govern the operations of investment bankers, broker-dealers, clearing members, custodians, investment advisors, and credit rating agencies, among others. On the other hand, Sebi has separate Merchant Bankers Regulations.
The IFSCA recently issued a consultation paper on fund management entities reducing onerous requirements. The one for market intermediaries could be on the same lines of ease of business.
On-boarding of investment bankers is key for direct listings at the GIFT City.
In August 2024, the IFSCA issued final regulations specifying the eligibility conditions and norms for direct listing on the exchanges operating at the GIFT City, opening the gates for domestic unlisted companies and foreign firms to explore fundraising from India’s “offshore” jurisdiction. The aim is to help startups raise global capital from offshore investors.