The impact investment arm of the Aavishkaar Group has become the first investment adviser to get a licence to operate in the country's first international financial services centre (IFSC) at Gujarat International Finance Tec-City, or GIFT City.
Aavishkaar Investment Advisers IFSC Pvt Ltd, a wholly owned subsidiary of Aavishkaar Capital, can now provide advisory services for foreign investors including offshore funds.
Entities regulated by the central bank, SEBI and the Insurance Regulatory & Development Authority of India can set up offices in the IFSC.
For instance, banks, insurance companies, stock broking firms, alternative investment funds and investment advisers, among others, can be a part of it.
The key aim of the GIFT City is to bring global financial services on-shore which are currently being rendered from overseas jurisdictions.
"Our intention is to further strengthen our global fund management platform and a presence within IFSC will help us achieve that by allowing us to service our offshore clients more efficiently," said Vineet Rai, CEO at Aavishkaar Capital.
SEBI had issued operating guidelines for investment advisers in the IFSC in January 2020, and gave certain relaxations via a circular dated February 28, 2020.
Under the framework, any recognised entity or entities desirous of operating in the IFSC as an investment adviser may form a company or limited liability partnership (LLP) to provide investment advisory services.
An applicant needs to have a net worth of not less than $0.7 million. In case the investment adviser is set up as a subsidiary, the net worth requirement is to be met by the subsidiary itself. However, if the subsidiary does not meet the criteria, the net worth of the parent can be considered.
The existing recognised entities in the IFSC can also apply for investment adviser registration without forming a separate company or LLP.
"We are sure that the presence of Aavishkaar will encourage more market participants to consider GIFT IFSC for setting up their investment advisory business," said Tapan Ray, managing director at GIFT City.
Currently, two international exchanges are operational in the IFSC which provide a trading platform for various products such as index derivatives, equity derivatives, currency derivatives, and commodities derivatives.
Recently, SEBI permitted listing and trading of real estate and infrastructure investment trusts on IFSC exchanges at GIFT City.
Days back, Citibank received an in-principle approval from the Reserve Bank of India and GIFT SEZ Authority to set up an IFSC banking unit at GIFT City.
Citibank became the 15th bank to set up its unit at India’s first IFSC after the first one was set up by YES Bank in October 2015.