The International Financial Services Centres Authority (“IFSCA”) in exercise of powers conferred under Regulation 10(1) of International Financial Services Centres Authority (Finance Company) Regulations, 2021 and Clause 21(1) of Circular dated December 23, 2024, vide Circular No. IFSCA-FCR0ITFS/3/2024-Banking/2025/001,[1] dated April 11, 2025, issued the amendments to the existing guidelines titled ‘Guidelines on setting up and operation of International Trade Finance Service Platform’ which were originally released on December 23, 2024 (“ITFS Guidelines”). The provisions laid hereunder shall come into force immediately.
- The amendments bring a change specifically to clause 12(2) of the ITFS Guidelines, which outlines the eligibility criteria for financiers operating on the platform.
- A key clarification has been added to item (i) of the Clause 12(2) of the ITFS Guidelines with respect to Assets Under Management (“AUM”). It is now clarified that AUM refers to the total market value of financial assets owned or managed by the financier, whether on its own behalf or for its clients.
- Item (iii) of Clause 12(2) of the ITFS Guidelines has also been revised to require that financiers demonstrate proven capability for credit or debt recovery. This capability may be demonstrated either directly or through outsourcing arrangements.
- Further, item (iv) of Clause 12(2) of the ITFS Guidelines has been amended to specify that the financier must be an incorporated entity engaged in the business of factoring.
- Additionally, a new requirement has been introduced through the insertion of item (v) under the Clause 12(2) of the ITFS Guidelines. It mandates that both the financier and any shareholders holding more than 10% (ten percent) of its share capital must be from jurisdictions which are not listed by the Financial Action Task Force (FATF) as ‘High Risk Jurisdictions – subject to call for action.’
[1]https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2Fcircular_itfs_fraemwork_amendment_11_04_202511042025064951.pdf&Title=Amendment%20to%20the%20circular%20titled%20%E2%80%9CGuidelines%20on%20setting%20up%20and%20operation%20of%20International%20Trade%20Finance%20Service%20Platform%E2%80%9D%20dated%20December%2023%2C%202024.&Date=11%2F04%2F2025