IFSCA Released Revised Framework for ITFS Platforms in GIFT City

Current Context: The International Financial Services Centres Authority (IFSCA) released the revised framework for International Trade Financing Services (ITFS) platforms in Gujarat International Finance Tec-City (GIFT City) on December 24, 2024.

• The revised framework includes several key changes:
• Rationalized Net Worth Requirements: The net worth requirements have been streamlined, making it easier for more entities to participate.
• Expanded Scope: Overseas companies can now factor receivables, and the list of eligible financiers has been broadened to include factors registered under the Factoring Registration Act, 2011.
• On-Tap Registration Process: A new on-tap registration process has been introduced, replacing fixed application timelines.
• Permissible Activities: The scope of permissible activities now includes secondary market transactions and clearing and settlement of funds.
• Eligible Participants: Payment service providers are now included, enabling easier access for participants to facilitate currency exchange and receive payments in their local currency.

Question:

1 What is the new scope introduced for overseas companies under the revised ITFS framework?

• A) Permission to factor receivables
• B) Limited factoring within India only
• C) Prohibition from engaging in factoring services
• D) Requirement to partner with local entities for transactions

Answer: A) The revised framework expands the scope to allow overseas companies to factor receivables, increasing the inclusivity of international participants.