International Financial Services Centres Authority (IFSCA) & Eastern Ghats

• Vaid's ICS, Lucknow
• 28, Oct 2020

Why in News?

A meeting of the International Financial Services Centres Authority (IFSCA) was held recently.

The Board, after detailed deliberations, approved the following regulations:

1. International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020
2. International Financial Services Centres Authority (Global In-House Centres) Regulations, 2020

About the International Financial Services Centres Authority (IFFSCA):

• IFFSCA was set up in 2019

Functions of the Authority:

• To regulate financial products (such as securities, deposits or contracts of insurance), financial services, and financial institutions which have been previously approved by any appropriate regulator (such as RBI or SEBI), in an IFSC.
• It will follow all processes which are applicable to such financial products, financial services, and financial institutions under their respective laws.
• The appropriate regulators are listed in a Schedule to the Bill and include the RBI, SEBI, IRDAI, and PFRDA.
• The central government may amend this schedule through a notification.

Composition:

IFFSCA will consist of nine members, appointed by the central government.

Members of the Authority will include:

1. the Chairperson,
2. one member each to be nominated from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA),
3. two members from among officials of the Ministry of Finance, and
4. two members to be appointed on the recommendation of a Search Committee.
5. Members will have a term of three years, subject to reappointment.

(A) International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020

The Government of India, on the recommendation of IFSCA, notified the bullion spot delivery contract and bullion depository receipt (with bullion as underlying) as Financial Products and related services as Financial Services under the IFSCA Act, 2019 on August 31, 2020.

IFSCA has been tasked with the responsibility of operationalization of this bullion Exchange. For the first time in India a single regulator will be regulating both the bullion spot and derivative contracts that would be traded on the Exchange.

The Authority approved the draft bullion regulations in its meeting today, which paves the way for setting up the entire ecosystem for bullion trading, namely, bullion exchange, depository, clearing house and vaults.

The salient aspects of the Bullion Exchange Regulations include:

• Functions and general obligations of a bullion exchange and clearing corporation
• Ownership and governance structure of a bullion exchange and clearing corporation
• Rights and Obligations of Bullion Depositories, Participants and Beneficial Owners
• The grant of registration to a vault manager by the Authority
• The role of bullion depositories
• Other operational aspects of the bullion exchange

Key Associated Terms:

Bullion Market:

A bullion market is a market through which buyers and sellers trade gold and silver as well as associated derivatives. The London Bullion Market is known as the primary global bullion market trading platform for gold and silver.

Depositary Receipt (DR):

It is a negotiable certificate issued by a bank representing shares in a foreign company traded on a local stock exchange. The depositary receipt gives investors the opportunity to hold shares in the equity of foreign countries and gives them an alternative to trading on an international market.

Derivative:

In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying".

Global In-house Centers:

They are service delivery operations typically in low-cost geographies, which are owned and operated by the same company receiving the services (i.e., not third-party outsourcing)

Global In-house Centers:

Global In-house Centers are service delivery operations typically in in low-cost geographies, which are owned and operated by the same company receiving the services (i.e., not third-party outsourcing)

(A) International Financial Services Centres Authority (Global In-House Centres) Regulations, 2020:

On October 16, 2020, Government of India, on the recommendation of IFSCA, had notified Global In-House Centres (GIC) as financial service to provide services relating to financial products and financial services.

Some of the salient features of the regulations approved by the Authority are as follows:

• A GIC may conduct its business in any mode permitted by the Authority, including branch mode.
• The applicant entity shall exclusively cater to its financial services group wherein the entities served must be located in a Financial Action Task Force (FATF) compliant jurisdiction.

Why in News?

All the historically and culturally significant mountains of the Eastern Ghats should be declared UNESCO cultural heritage sites.

The five States that the Ghats encompass – Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Odisha should prepare an action plan to protect and conserve their ecology and natural resources, the Greens’ Alliance for Conservation of Eastern Ghats (GRACE) and the Council for Green Revolution (CGR) have said.

About Eastern Ghats:

1. The Eastern Ghats run parallel to the eastern coastal plains of India. Unlike the Western Ghats, they are discontinuous in nature and is dissected by the rivers that drain into the Bay of Bengal.
2. As discussed above, most of these rivers have their origin in the Western Ghats. It must be noted that the Eastern Ghats are lower in elevation than the western Ghats. The highest peak of western Ghats is the Mahendragiri.
3. The difference in the elevation levels of the highest peaks in both the ghats can also be compared.
4. Anaimudi which is the highest peak of the western Ghats has a height of 2695 mts whereas Mahendragiri of eastern Ghats is of 150 mts.
5. The main crop produced in the Eastern Ghats is the Rice, which is also the staple food of the people living in the region.
6. The Eastern Ghats reappear as more or less a continuous hill range in Cuddapah and Kurnool districts of Andhra Pradesh where they are called as Nallamalai Range [Naxalite hideout in AP] with general elevation of 600-850 m.
7. The southern part of this range is called the Palkonda range.

Facts for Prelims:

The Union HRD Ministry has launched the Vidya Daan 2.0 program for inviting e-learning content contributions.

• ‘Vidya Daan’ is a digital program to enable contributions to improve teaching & learning.
• It encourages the sharing of high quality, curated, relevant & curriculum-linked digital content.
• This program attempts to synergize countrywide developments in the field of education by providing schools all over India, from the Metro cities to the smallest villages with good quality e-content.

Petersberg Climate Dialogue:

The 11th session of ‘Petersberg Climate Dialogue’ was held for the first time through video conferencing.

Facts: Petersberg Climate Dialogue has been organized by the Government of Germany since 2010.

Aim: To provide a forum for informal high-level political discussions, focusing both on international climate negotiations and the advancement of climate action.

• The 11th Dialogue was co-chaired by Germany and the United Kingdom, the incoming Presidency of 26th Conference of Parties (COP 26) to the United Nations Framework Convention on Climate Change (UNFCCC).
• Union Minister for Environment and Climate Change, Prakash Javadekar represented India in the virtual Dialogue.