The scheme
IFSCA issued the International Financial Services Centres Authority (Informal Guidance) Scheme, 2024 by circular dated 2 December 2024, under sections 12 and 13 of the IFSCA Act, 2019. It came into force on 1 January 2025. It gives a formal route for clarity on how IFSCA's rules apply to a proposed business, activity or transaction.
Two kinds of letter are available:
- No-action letter. The department indicates whether or not it would recommend action to IFSCA if the proposal described were carried out.
- Interpretive letter. The department interprets a specific provision in the context of the proposal or a specific set of facts. The provision may be in the IFSCA Act or IFSCA's rules, regulations, guidelines or circulars. It may also be in an RBI, SEBI, IRDAI or PFRDA circular or direction issued before IFSCA was established and now administered by it.
Who can apply, and when to use it
The scheme is open to:
- persons licensed, registered, recognised or authorised by IFSCA;
- persons intending to undertake a transaction in a financial product or service that IFSCA regulates;
- persons wishing to set up a unit in the IFSC; and
- others permitted by IFSCA.
The third category matters most at the approval stage. A prospective entrant can test a structure before filing its application.
Guidance is worth seeking in three situations: when the business model sits between frameworks, when the rules are unclear on a point that decides the structure, or when getting it wrong would be costly. Examples of such costs are a refused registration, enforcement or a forced restructuring. It is not worth seeking where the regulations or IFSCA's FAQs already answer the question, or where a published letter covers the same point.
What IFSCA will not take up
Departments may decline requests where:
- the query is general or the facts are not fully disclosed;
- the situation is hypothetical;
- the applicant has no direct or proximate interest;
- the legal provisions are not cited;
- a letter has already been issued on a substantially similar question and facts;
- an investigation, enquiry or enforcement action has begun;
- the issue is pending before a court or tribunal;
- policy concerns weigh against a response; or
- the department otherwise considers it fit to decline.
If a request does not meet the scheme, the fee is refunded less the processing fee. Under IFSCA's current fee circular, USD 250 is kept and USD 750 refunded.
How to apply
- Filing. The scheme provides for filing on SWIT. Until SWIT filing is enabled, applications go by email to IFSCA's nodal coordination cell. Check which route currently applies before filing.
- Type of letter. The application states that it is made under the scheme and whether it seeks a no-action letter or an interpretive letter.
- Content. It discloses and analyses all material facts and the applicable legal provisions. It must also show the link between the question and the applicant's current or proposed activity in the IFSC.
- Fee. USD 1,000 per application, paid as set out in IFSCA's fee circular (see IFSCA fees).
- Queries. The department may ask for more information by email. The applicant must reply within 15 days, or within any extension allowed, or the application may be rejected.
- Timing. The department endeavours to dispose of the application within 30 days of receipt. Time taken by the applicant to answer queries does not count.
A well-framed request is specific and factual, and states the applicant's own reading of the provision with reasons. It also deals with the obvious objections. Ask one discrete question per application. Bundling distinct questions invites a request to split them, which restarts the clock. Where there are several questions, file the most time-sensitive first. An informal call with the relevant department before filing often helps to shape the question.
What a letter is worth, and publication
A letter under the scheme is the view of the department, not a decision of IFSCA. It is not a conclusive determination of law or fact, it is not an order, and it cannot be appealed. It does not bind IFSCA, although IFSCA may generally act in accordance with it.
The guidance holds only while the applicant acts strictly in line with the facts and representations in the application. If guidance was obtained by fraud or misrepresentation, the department may declare it non-est. IFSCA accepts no liability if a request goes unanswered, is answered late, or if IFSCA later takes a different view.
All guidance is published on IFSCA's website. On request, on grounds of commercial sensitivity, the department keeps a letter confidential for 90 days from issue. Also on request, it redacts names or other specified details before publication. Plan the filing on the basis that the question, and probably the applicant's identity, will become public.