IFSCA Grade A cheat sheet

CRR: cash reserve ratio maintained with RBI; no interest paid; under RBI Act, 1934, Section 42. SLR: statutory liquidity ratio in cash/gold/approved securities under Banking Regulation Act, 1949, Section 24.

Basel III capital: CET1 minimum 4.5%, Tier 1 6%, total capital 8% of RWA; capital conservation buffer 2.5%; leverage ratio 3%; LCR = HQLA / net cash outflows over 30 days ≥ 100%.

NPA classification: substandard if overdue >90 days; doubtful if substandard >12 months; loss if identified as loss by bank/auditor/RBI. Provisioning: substandard 15%, doubtful 25-100%, loss 100%.

Priority sector lending target: 40% of ANBC; sub-targets: agriculture 18% (small/marginal farmers 10%), micro enterprises 7.5%, weaker sections 12%.

SARFAESI Act, 2002: enforcement of security interest without court intervention after 60-day notice; applies to secured creditors; not for agricultural land.

Insolvency and Bankruptcy Code, 2016: corporate resolution timeline 330 days including litigation; moratorium under Section 14; waterfall under Section 53.

Ind AS 109 expected credit loss: 12-month ECL for Stage 1, lifetime ECL for Stage 2 (significant increase in credit risk), credit-impaired Stage 3.

Negotiable Instruments Act, 1881: cheque validity 3 months from date; dishonour for insufficiency of funds attracts Section 138 if notice served within 30 days and complaint within 30 days of cause of action.

SEBI (Mutual Funds) Regulations, 1996: open-ended schemes must be launched within 12 months of filing SID; scheme categories per SEBI circular on categorization and rationalization (equity, debt, hybrid, solution-oriented, other).

NAV = (Total assets − Total liabilities) / Number of units outstanding. For a scheme, NAV per unit computed daily for open-ended schemes.

Expense ratio limits: equity schemes up to 2.25% for first ₹500 crore AUM, 2.00% next ₹250 crore, 1.75% next ₹1,250 crore, 1.50% next ₹3,000 crore, 1.25% balance; debt schemes lower (2.00% first ₹500 crore).

Entry load prohibited; exit load permitted subject to SEBI limits (e.g., 1% if redeemed within 1 year for equity).

Total expense ratio includes management fee, trustee fee, custodian fee, registrar fee, audit fee, marketing/distribution expenses (if borne by scheme).

AIF categories: Category I (venture capital, SME, infrastructure, social impact), Category II (private equity, debt funds), Category III (hedge funds, complex strategies). Minimum corpus ₹1 crore; investor minimum ₹1 crore (₹25 lakh for employees/directors).

PMS (Portfolio Management Services): minimum investment ₹50 lakh per client; SEBI registration required; fee structure subject to SEBI (Portfolio Managers) Regulations, 2020.

Mutual fund trustee: at least 2/3 independent trustees; trustee must not be associated with sponsor; SEBI approval for trustee appointment.

GIFT City IFSC: entities set up as Global In-House Centres (GICs) provide services to group entities; regulated by IFSCA (Banking) Regulations, 2020 and IFSCA (Finance Company) Regulations, 2021.

GIC can be set up as a company or LLP in IFSC; minimum net worth requirements vary by activity; parent/group must be regulated financial institution.

Permitted activities: back-office, IT, HR, finance, compliance, risk management, treasury support, and other support services to group entities.

IFSCA (Global In-House Centre) Guidelines: GIC must not undertake activities requiring separate license unless permitted; annual reporting to IFSCA.

Tax: GIC in IFSC eligible for 100% tax exemption on profits for 10 consecutive years out of 15 years under Section 80LA of Income Tax Act (subject to conditions).

GIC can employ foreign nationals; work permits subject to Indian immigration rules; IFSCA single-window clearance.

Capital requirements: minimum net worth USD 1 million for finance company; GIC as support service entity may have lower threshold as specified.

GIC must maintain arm's length pricing for services to group entities; transfer pricing documentation required.

SEBI (ICDR) Regulations, 2018: IPO via book building or fixed price; minimum 25% public shareholding for companies with post-issue capital >₹1,600 crore (10% for larger); offer for sale and fresh issue.

ASBA (Application Supported by Blocked Amount) mandatory for public issues; UPI-based ASBA for retail investors up to ₹2 lakh.

SEBI (LODR) Regulations, 2015: listed entity must have at least 1/3 independent directors if non-executive chairman, 1/2 if executive chairman; audit committee with 2/3 independent directors.

Insider trading: SEBI (Prohibition of Insider Trading) Regulations, 2015; trading window closure; disclosure of holdings by promoters/directors; UPSI (unpublished price sensitive information) handling.

Takeover Code: SEBI (SAST) Regulations, 2011; mandatory open offer at 26% acquisition; offer size 26%; creeping acquisition 5% per year.

FPI: SEBI (FPI) Regulations, 2019; categories I and II; registration through designated depository participants; investment limits in government securities and corporate bonds.

Stock exchange: SEBI (Stock Exchanges and Clearing Corporations) Regulations, 2018; minimum net worth ₹100 crore for recognised stock exchange; interoperability among clearing corporations.

Derivatives: SEBI permits equity derivatives, currency derivatives, commodity derivatives; eligibility criteria for stocks (market cap, liquidity, etc.).

IRDAI Act, 1999: regulates insurance business; Insurance Act, 1938; minimum capital for life and general insurers ₹100 crore; foreign investment up to 74% (as per 2021 amendment).

Solvency ratio: available solvency margin / required solvency margin ≥ 150%; required solvency margin based on IRDAI (Assets, Liabilities, and Solvency Margin of Insurers) Regulations, 2016.

Life insurance: premium payment modes; policyholder protection; free-look period 30 days for electronic policies, 15 days for others.

General insurance: motor third-party insurance mandatory; premium rates for third-party motor set by IRDAI; own-damage premium based on IDV.

Insurance products: ULIPs (Unit Linked Insurance Plans) with minimum lock-in 5 years; traditional participating and non-participating products; IRDAI (Insurance Products) Regulations, 2024.

Reinsurance: IRDAI (Reinsurance) Regulations, 2018; obligatory cession to GIC Re (e.g., 4% for fire, 5% for motor third party); order of preference for reinsurers.

Insurance intermediaries: brokers, agents, corporate agents, web aggregators; licensing and code of conduct under IRDAI regulations.

IFSC insurance: IFSCA (Insurance) Regulations, 2021; allows insurers/reinsurers in GIFT IFSC; minimum capital as specified; cross-border reinsurance.

SEBI regulates commodity derivatives under SEBI Act, 1992 and Securities Contracts (Regulation) Act, 1956; earlier regulated by FMC (merged into SEBI in 2015).

Commodity derivatives exchanges: MCX, NCDEX, ICEX, etc.; recognised by SEBI; trading in agri and non-agri commodities.

Contract specifications: lot size, tick size, delivery period; warehouses accredited by exchanges; quality standards as per contract.

Price discovery via spot and futures; hedging by farmers, processors, exporters; SEBI (Commodity Derivatives) Regulations, 2021.

Options on commodity futures: SEBI permitted options on futures; contract rules by exchanges.

Foreign investment in commodities: FPIs allowed in commodity derivatives only for hedging; no physical delivery for FPIs.

Metals: gold, silver, copper, aluminium, zinc, lead, nickel; price influenced by LME, COMEX, USD/INR.

Commodity transaction tax (CTT): levied on non-agricultural commodity derivatives at 0.01% on sell side (as per Finance Act).

BATF = Banking, Asset Management, Treasury, and Financial services; IFSCA (BATF) Service Providers framework: entities providing support services to financial services in IFSC.

BATF service providers include technology, operations, compliance, risk, fund administration, custody support, etc., to financial institutions in IFSC.

Registration with IFSCA required; minimum net worth and fit-and-proper criteria as specified in IFSCA (BATF) Guidelines.

Permitted activities: services to IFSC entities and foreign entities; must not undertake regulated financial activities without separate license.

BATF providers must comply with IFSCA (Anti-Money Laundering) Regulations, 2022; KYC and record-keeping.

Tax benefits: eligible for tax holiday under Section 80LA; GST exemptions for services in IFSC.

Reporting: annual compliance certificate to IFSCA; changes in shareholding/management require prior approval.

BATF provider can be a company or LLP; minimum net worth USD 50,000 or as specified; single-window clearance by IFSCA.

Cape Town Convention (Convention on International Interests in Mobile Equipment) and Aircraft Protocol: India ratified; provides international registry for aircraft objects; remedies for creditors.

IFSCA (Aircraft Leasing) Regulations, 2021: registration of aircraft leasing entities; minimum net worth USD 1 million; can lease to Indian and foreign airlines.

Tax: aircraft leasing in IFSC eligible for 100% tax exemption under Section 80LA for 10 years; no customs duty on import of aircraft for leasing (subject to conditions).

GST: leasing of aircraft in IFSC exempt from GST; import of aircraft for leasing exempt from customs duty.

Aircraft leasing entities can be set up as a company or LLP; IFSCA registration mandatory; fit-and-proper criteria.

Lease types: operating lease, finance lease, sale-and-leaseback; lessor must comply with DGCA regulations for aircraft registration.

Repossession: Cape Town Convention remedies include deregistration and export; IDERA (Irrevocable De-Registration and Export Request Authorisation) helps lessors.

IFSCA allows lessors to take security over aircraft; insolvency resolution under IBC applies; Cape Town Convention prevails over domestic law for aircraft objects.

IFSCA (FinTech) Regulations, 2021: FinTech entities can be registered as FinTech Entity (FE) or FinTech Innovation Hub (FIH); sandbox framework.

FinTech Entity: minimum net worth USD 50,000; can provide technology solutions to financial institutions; must not undertake regulated activities without license.

Regulatory sandbox: IFSCA (Framework for Regulatory Sandbox) allows testing innovative products in a controlled environment; eligibility criteria and timelines.

Payment services: IFSCA (Payment Services) Regulations, 2021; payment service providers need authorization; can offer cross-border payment services.

Digital lending: RBI guidelines on digital lending (2022) apply to IFSC entities in spirit; IFSCA has its own framework for lending.

Data protection: IFSCA (Data Protection) Guidelines, 2023; compliance with India's DPDP Act, 2023; data localization for certain data.

FinTech can access IFSC banking units for foreign currency funding; eligible for tax benefits under Section 80LA.

IFSCA single-window clearance for FinTech; collaboration with GIFT City ecosystem; innovation hub for testing.

IFSCA (Ship Leasing) Regulations, 2021: registration of ship leasing entities in IFSC; minimum net worth USD 1 million; can lease ships to Indian and foreign entities.

Tax: ship leasing in IFSC eligible for 100% tax exemption under Section 80LA for 10 years; customs duty exemption on import of ships for leasing.

GST: leasing of ships in IFSC exempt from GST; import of ships for leasing exempt from customs duty.

Ship leasing entities can be company or LLP; IFSCA registration mandatory; fit-and-proper criteria.

Lease types: bareboat charter, time charter, voyage charter, finance lease; lessor must comply with DG Shipping regulations.

Security: mortgage over ship can be registered under Merchant Shipping Act, 1958; IFSCA allows security interests.

Repossession: admiralty jurisdiction; ship arrest; international conventions like Cape Town Convention do not apply to ships (only aircraft).

IFSCA allows ship leasing to foreign entities; foreign currency funding; benefits under Section 80LA.