According to the draft Bill, prepared by the finance ministry, the proposed authority will be headed by a chairperson and will have one member each nominated by the RBI, Sebi, Irdai and the Pension Fund Regulatory and Development Authority (PFRDA). Two members will be nominated by the central government. There will be two other full-time or part-time members.
An IFSC like GIFT City tries to provide a business and regulatory environment comparable to any leading international financial centre in the world. This is aimed at providing Indian corporate entities with easier access to financial markets and also attracting services and transactions that are now carried out in offshore locations.
The need for a separate unified regulator arose after the existing regulators expressed concerns that transactions in GIFT City can have an impact on the domestic markets.
"The establishment of a unified financial regulator for IFSCs will result in providing a world-class regulatory environment to market participants from an ease of doing business perspective. This will provide stimulus for further development of IFSCs in India and enable bringing back financial services and transactions that are currently carried out in offshore financial centres," said the official statement.