To bolster the financial ecosystem at the International Financial Services Centre (IFSC) in Gujarat International Finance Tech-City (GIFT City), the Securities and Exchange Board of India (SEBI) has granted permission to credit rating agencies (CRAs) and ESG rating providers (ERPs) to operate under the jurisdiction of the International Financial Services Centres Authority (IFSCA).
According to SEBI's latest circular, the inclusion of IFSCA in the list of financial sector regulators will allow SEBI-registered CRAs and ERPs to conduct their rating activities within the IFSC-GIFT City framework.
The ESG ratings undertaken by ERPs under IFSCA guidelines will now fall under the purview of IFSCA. This means that any issues arising from the activities of these CRAs and ERPs in the IFSC will be addressed by IFSCA.
IFSCA will handle complaints related to services provided by ERPs within the IFSC. This includes enforcement actions and the furnishing of information to third parties, including statutory or judicial bodies.
Under Regulation 28E(d) of SEBI (Credit Rating Agencies) Regulations, 1999, and Para 7.1 of the Master Circular for ERPs dated May 16, 2024, ERPs are authorized to undertake ESG rating activities as required by other financial sector regulators. The inclusion of IFSCA as a financial sector regulator under Annexure 4 of the Master Circular for ERPs formally extends this authorization to the IFSC.