(1) This Act may be called the International Financial ServicesCentres Authority Act, 2019.

(2) It shall come into force on such date1as the Central Government may, by notification in the OfficialGazette, appoint; and different dates may be appointed for different provisions of this Act, and any referencein any provision to the commencement of this Act shall be construed as a reference to the coming intoforce of that provision.

1. 27th April, 2020Sections 1 to 11 (both inclusive), 14, 15, 16, 27, 29, 30 and 34, vide notification No. S.O. 1384(E), dated27th April, 2020, see Gazette of India, Extraordinary, Part II, sec. 3(ii).

21st August, 2020--Sections 12, 17 to 26 (both inclusive), 28, 31 and 32, vide notification No. S.O. 2844(E), dated 21st August,2020, see Gazette of India, Extraordinary, Part II, sec. 3(ii).

1st October, 2020---Section 13 and 33, vide notification No. S.O. 3374(E), dated 29th September, 2020, see Gazette of India,Extraordinary, Part II, sec. 3(ii).

This Act shall apply to the International Financial Services Centres set up undersection 18 of the Special Economic Zones Act, 2005 (28 of 2005).

(1) In this Act, unless the context otherwise requires,--

(a) u201cappropriate regulatoru201d means any financial sector regulator specified in the First Schedule tothis Act;

(b) u201cAuthorityu201d means the International Financial Services Centres Authority established undersub-section (1) of section 4;

(c) u201cfinancial institutionu201d means a unit set up in an International Financial Services Centre andwhich is engaged in rendering financialservicesin respect of any financial product;

(d) u201cfinancial productu201d means--

(i) securities;

(ii) contracts of insurance;

(iii) deposits;

(iv) credit arrangements;

(v) foreign currency contracts other than contracts to exchange one currency for another thatare to be settled immediately; and

(vi) any other product or instrument that may be notified by the Central Government from timeto time.

(e) u201cfinancial serviceu201d means--

(i) buying, selling, or subscribing to a financial product or agreeing to do so;

(ii) acceptance of deposits;

(iii) safeguarding and administering assets consisting of financial products, belonging toanother person, or agreeing to do so;

(iv) effecting contracts of insurance;

(v) offering, managing or agreeing to manage assets consisting of financial products belongingto another person;

(vi) exercising any right associated with a financial product or financial service;

(vii) establishing or operating an investment scheme;

(viii) maintaining or transferring records of ownership of a financial product;

(ix) underwriting the issuance or subscription of a financial product;

(x) providing information about a person's financial standing or creditworthiness;

(xi) selling, providing, or issuing stored value or payment instruments or providing paymentservices;

(xii) making arrangements for carrying on any of the services in sub-clauses (i) to (xi);

(xiii) rendering or agreeing to render advice on or soliciting for the purposes of--

(A) buying, selling, or subscribing to, a financial product; or

(B) availing any of the services in sub-clauses (i) to (xi); or

(C) exercising any right associated with a financial product or any of the services inclauses (i) to (xi);

(xiv) any other service that may be notified by the Central Government from time to time;

(f) u201cforeign currencyu201d shall have the meaning assigned to it in clause (m) of section 2 of theForeign Exchange Management Act, 1999 (42 of 1999);

(g) u201cInternational Financial Services Centreu201d means an International Financial Services Centre setup, before or after the commencement of this Act, under section 18 of the Special Economic Zones Act,2005 (28 of 2005);

(h) u201cMemberu201d means a Member of the Authority and includes the Chairperson;

(i) u201cnotificationu201d means a notification published in the Official Gazette, and the expressionsu201cnotifiedu201d and u201cnotifyu201d shall be construed accordingly;

(j) u201cprescribedu201d means prescribed by rules made by the Central Government under this Act;

(k) u201cregulationsu201d means the regulations made by the Authority under this Act.

(2) Words and expressions used and not defined in this Act but defined in the Acts specified undercolumn (3) of the First Schedule to this Act shall have the meanings respectively assigned to them inthose Acts.

(1) The Central Government shall, bynotification, for the purposes of this Act, establish an Authority by the name of the InternationalFinancial Services Centres Authority.

(2) TheAuthority shall be a body corporate having perpetualsuccession and a common seal, and subjectto the provisions of this Act, with power to enter into and execute contracts, acquire, hold and dispose ofproperty, both movable and immovable, and shall, by the said name, sue and be sued.

(3) The head office of the Authority shall be at such place as the Central Government may, bynotification,decide.

(4) The Authority may, with the prior approval of the Central Government, establish its offices at otherplaces in India or outside India.

(1) The Authority shall consist of the following Members, to beappointed by the Central Government,namely:--

(a) a Chairperson;

(b) one Member each to be nominated by--

(i) the Reserve Bank of India, ex officio;

(ii) the Securities and Exchange Board of India, ex officio;

(iii) the Insurance Regulatory and Development Authority of India, ex officio; and

(iv) the Pension Fund Regulatory and Development Authority, ex officio;

(c) two Members, from amongst the officials of the Ministry dealing with Finance, to be nominated bythe Central Government, ex officio; and

(d) two other Members to be appointed by the Central Government on the recommendation of aSelection Committee.

(2) The Chairperson shall be a whole-time Member and other Members referred to in clause (d) ofsub-section (1) may be appointed as whole-time or part-time Members as the Central Government maydeem fit.

(3) The Members shall be persons of ability, integrity and standing who have shown capacity indealing with matters relating to financial sectors or have special knowledge or experience of law,finance, economics, accountancy, administration or in any other discipline which in the opinion of the CentralGovernment, shall be useful to the Authority.

(4) The Selection Committee referred to in clause (d) of sub-section (1) shall consist of such Membersand constituted by the Central Government in such manner as may be prescribed.

(1) TheChairperson and a Member shall hold office for a term of three years from the date on which he enters uponhis office and shall be eligible for re-appointment:

Provided that no person shall hold office as a Chairperson after he has attained the age of sixty-fiveyears or as a whole-time member after he has attained the age of sixty-two years.

(2) The salaries and allowances payable to, and other terms and conditions of service of, the Members,other than ex officio Members, shall be such as may be prescribed.

(3) Notwithstanding anything in sub-section (1), a Member may--

(a) resign from his office by giving in writing to the Central Government a notice of not less thanthree months; or

(b) be removed from his office in accordance with the provisions of section 7.

(4) No Member, other than ex officio Member, shall, for a period of two years from the date on whichthey cease to hold office as such, except with the previous approval of the Central Government, accept--

(a) any employment either under the Central Government or under any State Government; or

(b) appointment in any financial institution in the International Financial Services Centres.

The Central Government may remove from office a Member,who--

(a) is, or at any time has been, adjudged as insolvent; or

(b) has become physically or mentally incapable of acting as a Member; or

(c) has been convicted of an offence which in the opinion of the Central Government involvesmoral turpitude;or

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as aMember; or

(e) hasso abused his position so asto render his continuance in office detrimental to public interest:

Provided that no Member shall be removed from office under clause (d) or clause (e) unless hehas been given a reasonable opportunity of being heard in the matter.

(1) The Authority shall meet at such times and places, and shall observesuch rules of procedure in regard to the transaction of business at its meetings (including quorum at suchmeetings) as may be specified by regulations.

(2) The Chairperson, if for any reason, he is unable to attend a meeting of the Authority, any otherMember chosen by the Members present from amongst themselves at the meeting shall preside at themeeting.

(3) All questions which come up before any meeting of the Authority shall be decided by a majority ofvotes of the Members present and voting, and, in the event of an equality of votes, the Chairperson, or in hisabsence, the person presiding, shall have a casting vote.

(4) Any Member who has any direct or indirect interest in any matter likely to come up for considerationat a meeting of the Authority shall, as soon as possible after the relevant circumstances have come to hisknowledge, disclose in writing, the nature of his interest at such meeting and such disclosure shall be recorded in the proceedings of the Authority and such Member shall not take part in any deliberation ordecision of the Authority with respect to that matter.

No act or proceeding of theAuthority shall be invalid merely by reason of, --

(a) any vacancy or defect, in the constitution of the Authority; or

(b) any defect in the appointment of a person as a member of the authority.

the Chairperson shall have the powers of generalsuperintendence anddirection in respect of all administrative matters of the Authority.

(1) the Authority may appoint such officers andother employees as it considers necessary for the efficient discharge of its functions under this act.

(2) the salaries and allowances payable to, and other terms and conditions of service of, officers andother employees of the Authority appointed under sub-section (1) shall be such as may be specified byregulations.

(1) Subject to the provisions of this Act, it shall be the duty of theAuthority to develop and regulate the financial products, financial services and financial institutions in theInternational Financial Services Centres, by such measures as it deemsfit.

(2) Without prejudice to the generality of the provisions in sub-section (1), the powers and functions ofthe Authority shall include--

(a) regulating the financial products, financial services and financial institutions in an InternationalFinancial Services Centre which have been permitted, before the commencement of this Act, by anyregulator for any International Financial Services Centre;

(b) regulating such other financial products, financial services or financial institutions in theInternational Financial Services Centres as may be notified by the Central Government from time totime;

(c) recommending to the Central Government such other financial products, financial services andfinancial institutions which may be permitted in an International Financial Services Centre by theCentral Government;

(d) perform such other functions as may be prescribed.

(1) Notwithstanding anything contained in any other law for the time being in force, allpowers exercisable by an appropriate regulator, specified under column (2) of the First Schedule, under therespective Acts as specified in the corresponding entry under column (3) of the said Schedule shall, in theInternational Financial Services Centres, be exercised by the Authority in so far as it relates to theregulation of the financial products, financial services or financial institutions, as the case may be.

(2) The Central Government may, by notification, amend the First Schedule by including therein anyfinancial sector regulator and the law administered by it, or omitting therefrom any financial sector regulator or any law specified therein, and on the publication of such notification, such regulator and thelaw shall be deemed to be included in, or omitted from, the First Schedule.

(3) Every notification issued under sub-section (2) shall be laid before each House of Parliament.

(4) For the purposes of sub-section (1), the provisions of the respective Acts specified under column (3)of the First Schedule relating to--

(a) the manner of filing an application for recognition or registration or withdrawal of recognition orregistration or furnishing of information or reports;

(b) the procedure of inspection, investigation or prosecution of offences, settlement of civil andadministrative proceedings, compounding or adjudication of any offence or penalty, or actions to betaken in furtherance of such inspection, investigation, or adjudication or filing of appeals arisingtherefrom;

(c) the determination or settlement, as the case may be, of any fee or fine or penalty or any othersum of amount or punishment for the contravention of any provisions of respective Acts specified inthe First Schedule and recovery of such fine or penalty,

shall, mutatis mutandis, apply to financial products, financial services and financial institutions under thisAct, as they apply to the financial products, financial services and financial institutions under suchrespective Acts.

(5) The penalties, fines, fees and settlement amounts shall be collected or realised in the foreigncurrency equivalent of the penalty or fine imposed.

Explanation.--The rate of exchange for computing the foreign currency equivalent to Indian rupeesshall be such as are as notified by the Reserve Bank of India on the date of the order imposing the penaltyor fine, as the case may be.

(6) All sums realised by way of penalties or fines under this Act shall be credited to the ConsolidatedFund of India in Indian rupees.

(7) The Authority may, in addition to the above, specify by regulations the manner in which thefunctions may be performed by the Authority for carrying out the provisions of this section.

The Central Government may, after due appropriation made byParliament by law in this behalf, make to the Authority grants of such sums of money as the CentralGovernment may think fit for being utilised for the purposes of this Act.

(1) There shall be constituted a Fund to be called the InternationalFinancial Services Centres Authority Fund and there shall be credited thereto--

(a) all grants, fees and charges received by the Authority under this Act; and

(b) all sums received by the Authority from the sources as may be decided upon by the CentralGovernment.

(2) The Fund shall be applied for meeting--

(a) the salaries, allowances and other remuneration of Members, officers and other employees ofthe Authority; and

(b) other expenses incurred by the Authority in connection with the discharge of its functions andfor the purposes of this Act.

(1) The Authority shall maintain proper accounts and other relevantrecords and prepare an annual statement of accounts in such form as may be prescribed by the CentralGovernment in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the Authority shall be audited by the Comptroller and Auditor-General ofIndia at such intervals as may be specified by him and any expenditure incurred in connection with suchaudit shall be payable by the Authority to the Comptroller and Auditor-General of India.

(3) The Comptroller and Auditor-General of India and any other person appointed by him in connectionwith the audit of the accounts of the Authority shall have the same rights and privileges and authority inconnection with such audit as the Comptroller and Auditor-General of India generally has in connectionwith the audit of the Government accounts and, in particular, shall have the right to demand the production ofbooks, accounts, connected vouchers and other documents and papers and to inspect any of the offices of theAuthority.

(4) The accounts of the Authority as certified by the Comptroller and Auditor-General of India or anyother person appointed by him in this behalf together with the audit report thereon shall be forwardedannually to the Central Government and that Government shall cause the same to be laid before eachHouse of Parliament.

(1) The Authority shall constitute a Performance ReviewCommittee, consisting of at least two Members of the Authority to review the functioning of theAuthority, whether--

(a) it has adhered to the provisions of the applicable laws while exercising powers or performingfunctions under this Act;

(b) the regulations made by the Authority to give effect to the provisions of this Act promotetransparency and best practices of governance; and

(c) the Authority is managing risks to its functioning in a reasonable manner.

(2) The Performance Review Committee shall make the review under sub-section (1) at least once inevery financial year, and submit a report of its findings to the Authority which shall forward a copy thereofalong with action taken, if any, pursuant to such report to the Central Government within a period of threemonths from the date of receipt of the report.

(3) The Performance Review Committee shall maintain a system by which any person may submit to thecommittee, any incidence of--

(a) non-adherence of the provisions of any applicable law by the Authority;

(b) misappropriation of resources of the Authority by any person;

(c) abuse of powers of the Authority by any Member or employee of the Authority; or

(d) non-compliance of any decision of the Authority by any Member or employee of the Authority.

(4) The Authority shall make regulations governing the information to be provided to the PerformanceReview Committee, and the provision of adequate resources to enable the committee to discharge itsfunctions under this section.

(1) The Authority shall maintain such website or any other universallyaccessible repository of electronic information as may be specified by regulations.

(2) All the regulations and orders issued by the Authority shall be published in its website orrepository maintained under sub-section (1).

(3) The Authority shall review the quality of the website or the repository, based on international bestpractices, once every year and publish the report containing its findings with the annual report.

(1) The Authority shall furnish to the Central Government at such time andin such form and manner as may be prescribed or as the Central Government may direct, such returns andstatements and such particulars with regard to any proposed or existing programme for the developmentand regulation of the units in the International Financial Services Centres, as the Central Government may,from time to time, require.

(2) Without prejudice to the provisions of sub-section (1), the Authority shall, within ninety days afterthe end of each financial year, submit to the Central Government, a report in such form, as may beprescribed, giving a true and full account of its activities, policies and programmes during the previousfinancial year.

(3) A copy of the report received under sub-section (2) shall be laid, as soon as may be after it isreceived, before each House of Parliament.

Every transaction of financial services in an InternationalFinancial Services Centre shall be in such foreign currency as may be specified by regulations inconsultation with the Central Government.

(1) Without prejudice to the foregoing provisions of this Act, theAuthority shall, in exercise of its powers or the performance of its functions under this Act, be bound bysuch directions on questions of policy as the Central Government may give in writing to it from time totime:

Provided that the Authority shall, as far as practicable, be given an opportunity to express its viewsbefore any direction is given under this sub-section.

(2)The decision of the Central Government, whether a question is one of policy or not, shall be final.

(1) If at any time the CentralGovernment is of the opinion that--

(a) on account of circumstances beyond the control of the Authority, it is unable to discharge thefunctions or perform the duties imposed on it by or under this Act; or

(b) the Authority has persistently defaulted in complying with any direction given by the CentralGovernment under this Act or in the discharge of the functions or performance of the duties imposed onit by or under this Act and as a result of such default the financial position of the Authority or theadministration of the Authority has deteriorated; or

(c) circumstances exist which render it necessary in the public interest so to do,

the Central Government may, by notification and for reasons to be specified therein,supersede the Authority forsuch period, not exceeding six months, as may be specified in the notification:

Provided that before issuing any such notification, the Central Government shall give a reasonableopportunity to the Authority to make representations, if any, of the Authority.

(2) Upon the publication of a notification under sub-section (1) superseding the Authority,--

(a) the Chairperson and other Members shall, as from the date of super session, vacate their officesas such;

(b) all the powers, functions and duties which may, by or under this Act, be exercised ordischarged by or on behalf of the Authority shall, until the Authority is reconstituted undersub-section (3), be exercised and discharged by such person or persons as the Central Governmentmay direct; and

(c) all properties owned or controlled by the Authority shall, until the Authority is reconstitutedunder sub-section (3), vest in the Central Government.

(3) On or before the expiration of the period of super session specified in the notification issued undersub-section (1), the Central Government shall reconstitute the Authority by a fresh appointment of itsChairperson and other Members and in such case any person who had vacated his office under clause (a) ofsub-section (2) shall not be deemed to be disqualified for reappointment.

(4) The Central Government shall, as soon as may be, cause a copy of the notification issued undersub-section (1) and a full report to any action taken by it, to be laid before each House of Parliament.

(1) The Authority may, by general or special order in writing, delegate toany Member or officer of the Authority subject to such conditions, if any, as may be specified in the order,such of its powers and functions under this Act (except the powers under section 28) as it may deemnecessary.

(2) The Authority may, by a general or special order in writing, also form committees of the Membersand delegate to them the powers and functions of the Authority, as may be specified by regulations.

The Members,officers and employees of the Authority shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the meaning of section 21 of the IndianPenalCode (45 of 1860).

No suit, prosecution or other legal proceedings shalllie against the Central Government or the Authority or its Members, officers or other employees, foranything which is done, or intended to be done, in good faith under this Act.

Nothing contained in any other law or enactment for the time being inforce, in relation to taxation, including the Income-tax Act,1961 (43 of 1961),shall make the Authority liableto pay income-tax or any other tax or duty with respect to its income, services or profits or gains.

(1) The Central Government may, by notification, make rules for carryingout the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may providefor all or any of the following matters, namely:--

(a) the composition and the manner of constitution of the Selection Committee under sub-section(4) of section 5;

(b) the salaries and allowances and other terms and conditions of service of Members undersub-section (2) of section 6;

(c) other functions to be performed by the Authority under clause (d) of sub-section (2) ofsection 12;

(d) the form in which the accounts and other relevant records to be maintained and annualstatement of accounts to be furnished under sub-section (1) of section 16;

(e) the form and manner of furnishing of returns and statements and other particulars undersub-section (1) of section 19;

(f) the form of annual report of activities, policies and programmes under sub-section (2) ofsection 19;

(g) any other matter which is to be, or may be, prescribed.

(1) The Authority may, by notification, make regulationsconsistent with this Act and the rules made thereunder for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations mayprovide for all or any of the following matters, namely:--

(a) the time and place of meetings and the rules of procedure in regard to transaction of businessat such meetings under sub-section (1) of section 8;

(b) the salaries and allowances and other terms and conditions of service of officers and otheremployees of Authority under sub-section (2) of section 11;

(c) the manner in which the Authority may perform its functions under sub-section (7) ofsection 13;

(d) the manner of providing information to the Performance Review Committee under sub-section(4) of section 17;

(e) the maintenance of the website or any other universally accessible repository of electronicinformation under sub-section (1) of section 18;

(f) the foreign currency in which transaction of financial services in International Financial ServicesCentres may be conducted under section 20;

(g) the powers and functions of the Authority which may be delegated under sub-section (2) ofsection 23;

(h) any other matter which is required to be or may be, specified by regulations.

Every rule and every regulation madeunder this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is insession, for a total period of thirty days which may be comprised in one session or in two or moresuccessive sessions, and if, before the expiry of the session immediately following the session or thesuccessive sessions aforesaid, both Houses agree in making any modification in the rule or regulation orboth Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafterhave effect only in such modified form or be of no effect, as the case may be; so, however, that any suchmodification or annulment shall be without prejudice to the validity of anything previously done underthat rule or regulation.

The provisions of this Act shall have effect notwithstanding anythinginconsistent therewith contained in any other law for the time being in force or in any instrument havingeffect by virtue of any law other than this Act.

(1) The Central Government may, by notification, direct that any of the provisions ofany other Central Act or any rules or regulations made thereunder or any notification or order issued ordirection given thereunder (other than the provisions relating to making of the rules or regulations)specified in the notification--

(a) shall not apply to financial products,financial services or financial institutions, as the case may be,in an International Financial Services Centre; or

(b) shall apply to financial products, financial services or financial institutions, as the case may be,in an International Financial Services Centre with such exceptions, modifications and adaptations, asmay be specified in the notification.

(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draftbefore each House of Parliament, while it is in session, for a total period of thirty days which may becomprised in one session or in two or more successive sessions, and if, before the expiry of the sessionimmediately following the session or the successive sessions aforesaid, both Houses agree in disapprovingthe issue of the notification or both Houses agree in making any modification in the notification, thenotification shall not be issued or, as the case may be, shall be issued only in such modified form as may beagreed upon by both the Houses.

(1) If any difficulty arises in giving effect to the provisions of thisAct, the Central Government may, by order, published in the Official Gazette, make such provisions notinconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:

Provided that no order shall be made under this section after the expiry of five years from thecommencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before eachHouse of Parliament.

The enactments specified in the Second Schedule shall beamended in the manner specified therein.

All rules and regulations made or purporting to have been made or all notificationsissued or purporting to have been issued under any Central Act relating to the financial products, financialservices or financial institutions, as the case may be, shall, in so far as they relate to matters for whichprovision is made in this Act or the rules or regulations made or notification issued thereunder and are notinconsistent therewith, be deemed to have been made or issued under this Act as if this Act had been inforce on the date on which such rules were made or notifications were issued and shall continue to be inforce unless and until they are superseded by any rules or regulations made or notifications issued underthis Act.