CAM GIFT City IFSC Updates

Framework for ESG Ratings and Data Products Providers in the IFSC

Vide circular dated October 30, 2024, International Financial Services Centres Authorities (“IFSCA”) issued the Framework for ESG Ratings and Data Products Providers (“ERDPP”) in the International Financial Services Centres (“IFSC”) (“ERDPP Circular”).? The circular recognises ERDPP as intermediaries under IFSCA (Capital Market Intermediaries) Regulations, 2021 (“CMI Regulations”).

Key provisions under the ERDPP Circular:

Applicability: Entities desirous of undertaking activities relating to ESG Ratings and ESG Data Products from IFSC.

Registration: Entities will need to obtain the necessary registrations under CMI Regulations. Credit Rating Agency registered with IFSCA under CMI Regulations are not required to obtain separate registration for ERDPP but ESG Rating Provider registered with Securities and Exchange Board of India (“SEBI”) undertaking ESG Ratings activities requires registration under CMI Regulations.

Legal form of applicant: Establishing a branch or forming a company or limited liability partnership or body corporate in IFSC. Branch structure is permitted only for an entity which is already undertaking activities relating to ESG Ratings or ESG Data Products in India or foreign jurisdiction.

Net Worth Requirement: USD 25,000

Fit and proper requirements: As specified under CMI Regulations.

Staffing: The entity will be required to appoint a principal officer and a compliance officer. At least one person is to be designated as Principal Officer and such person must have adequate experience in activities relating to credit ratings of ESG Ratings.

Permissible Activities: Undertake services relating to ESG Ratings and ESG Data Products in IFSC or foreign jurisdiction.

Code of Conduct: The ERDPP registered with IFSCA must follow the code of conduct on a ‘comply’ or ‘explain’ basis. The compliance of these principles must be disclosed on the website of the Registered ERDPP.

ESG Rating process: A Registered ERDPP providing ESG Ratings needs to disclose the guidelines / criteria/ methodology on the rating process on its website.

Segregation: ERDPP registered with IFSCA must segregate the activities relating to ESG Ratings and ESG Data Products from its other activities to ensure that there is no conflict of interest between these activities.

Grievance Redressal: ERDPP registered with IFSCA must take adequate steps for redressal of grievances received in connection its activities and need to maintain records related to grievances and redressal of such grievances.

Fees: Application Fees of USD 1,000 and Registration Fees of USD 3,500. Annual Fee post year of registration is USD 3,500.

The circular is available here

?

?

?