Chapter II — Powers, Functions and Regulation-Making

The single-window regulatory jurisdiction Section 12–13 gives IFSCA over financial products, services and institutions in an IFSC, and its power to make regulations.

Section 12 — regulatory jurisdiction

Section 12 vests IFSCA with the powers otherwise exercisable by RBI, SEBI, IRDAI and PFRDA (under their respective parent Acts) in relation to financial products, financial services and financial institutions in an IFSC — the practical effect being that an IFSC entity deals with one regulator, not four, for its core licensing, supervision and enforcement needs.

Section 13 — power to issue directions

IFSCA may issue directions to any person or an entire class of persons in an IFSC in the interests of orderly development of financial services, investor protection or market integrity — mirroring the direction-issuing powers RBI/SEBI hold under their own statutes, but exercised through a single authority.

Regulation-making power (Section 28)

IFSCA makes regulations, with previous publication, covering registration/licensing conditions, permissible activities, capital and net-worth norms, corporate-governance requirements, and periodic reporting for each category of regulated entity. Because IFSCA is younger than RBI/SEBI/IRDAI, its regulation-making has proceeded activity-by-activity since 2020 rather than as one consolidated code — anyone assessing compliance must check which specific regulation (Fund Management, Banking, Capital Market Intermediaries, Insurance, Bullion, FinTech, and others) governs their exact activity, since general principles from the domestic regulator's equivalent framework do not automatically carry over.

Overlap and carve-out with domestic regulators

Where an IFSC entity's counterparty or downstream activity touches the domestic tariff area (e.g. an IBU lending to a resident borrower under the External Commercial Borrowings route), the domestic regulator's framework (FEMA/RBI ECB norms) continues to apply in parallel — IFSCA jurisdiction covers the IFSC-side entity, not automatically every leg of a cross-border transaction.

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