Segregated Nominee Account Structure in International Financial Service Centre (IFSC)
Summary
This circular permits a Segregated Nominee Account Structure in the International Financial Services Centre (IFSC) to facilitate foreign investor market access. It mandates that stock exchanges, brokers, and Providers furnish trade and KYC information to SEBI upon request. The document outlines eligibility criteria for Providers, registration processes, and specific operational requirements for KYC, order entry, margining, and position monitoring.
Text
it has been decided to permit Segregated Nominee Account Structure in IFSC wherein orders of foreign investors may be routed through eligible Segregated Nominee Account Providers... for trading on stock exchanges in IFSC
It shall be obligatory on the stock exchanges, brokers and ‘Providers’ to furnish to SEBI, inter alia, information relating to trades on stock exchanges in IFSC originated by/through ‘Providers’, including KYC details of their end-clients, as and when requested.
Stock exchanges in IFSC shall ensure that the provisions of Prevention of Money Laundering Act, 2002 (PMLA) and the rules thereof... are adhered to by ‘Providers’ for their end-clients.
take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations;
bring the provisions of this circular to the notice of their members and also disseminate the same on their websites;
communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Report.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Such eligible entities shall be called Segregated Nominee Account Providers.
‘Providers’ shall be registered with Stock Exchange / Clearing Corporation in IFSC for providing Segregated Nominee Account services to their end-clients
Stock Exchanges shall lay down eligibility criteria/norms for ‘Providers’, including ‘net worth’, which shall not be less than that prescribed by other leading stock exchanges offering similar structures.
‘Providers’ shall be required to ensure appropriate due diligence of end-clients as per global standards including KYC and AML compliance before on-boarding clients for offering Segregated Nominee Accounts to them.
An end-client shall open Segregated Nominee Account with only one ‘Provider’. Legal Entity Identifier (LEI) code may be used to ensure that the end-client does not open Segregated Nominee Account with more than one ‘Provider’...
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Source: SecMarx — Segregated Nominee Account Structure in International Financial Service Centre (IFSC). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.