IFSCA allows issuance of Derivative Instruments by Non-Banking FPIs
Shilpi Maheshwari
SEBI Registered Investment Advisor || WealthCraft Consultants INA000019682
After permitting 100% NRI contribution in IFSC based FPIs, the regulatory announced that Offshore Derivative Instruments (ODIs) issued in GIFT-IFSC, would be recognized as valid contracts. Erstwhile, only IFSC banking entities registered as FPIs were allowed to do that.
Now, IFSCA registered non-bank entities, registered with SEBI as FPIs, can also issue Derivative Instruments with Indian securities as underlying, in GIFT-IFSC.
However, the entity issuing such Derivative Instruments in GIFT-IFSC shall ensure compliance with the requirements on issuance of ODIs, issued by SEBI and IFSCA, from time to time.
It will only increase the scope of IFSC registered FPIs, but may also boost participation of overseas investors in Indian Markets. Even for those investor who do not wish to invest directly but shall remain as beneficial owners.