On March 23, 2022, International Financial Services Centres Authority notified International Financial Services Centres Authority (Performance Review Committee) Regulations, 2022. Performance Review Committee is formed to review and the functions carried on by the International Financial Services Centres Authority.
Under Section 12 of International Financial Services Centres Authority Act, 2019 (Act), Authority–
- Develops and regulates the financial products, financial services and financial institutions in an International Financial Services Centre.
- Recommends to the Central Government financial products, financial services and financial institutions which may be permitted in an International Financial Services Centre by the Central Government for time to time.
These regulations will come into force from the 23rd March, 2022 to conduct review activities in order to adhere to the functions of Authority under Section 17 of the Act.
Performance Review Committee has been created to review, at least once in every financial year, the following-
- Adherence of the provisions of the Act, to fulfil the function of the Authority.
- To create transparency in the practices of Authority and manage risk in a reasonable manner.
Key elements of the Regulation:
Committee- Composition and Operation-
- As per Para 3 of the Regulation, Performance Review Committee will be consisting of members nominated by the Board. The Board [Para 2 (c)] is created under the Members of the committee are as under-
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- Two members of the Authority
- Two independent experts.
- The members, including the independent experts, of the Committee shall be nominated for a period of three years.
- Committee shall review the compliance and governance functions of the Authority to assess as to whether the Authority has adhered to the provisions of the applicable laws.
- Whether the regulation reduces the compliance burden of stakeholders and promotes transparency and best practices of governance.
- Risk management by the Authority in relation to its functions.
Risk Management-
According to Para 6 of the Regulation, the Review Committee will ensure the functions of the Authority in managing the risk in reasonable manner. Risk management include-
- Ensuring adequacy and effectiveness of the risk monitoring measures for its activities.
- Risk identification measures are appropriate and assure the safety and soundness of the operations of the Authority.
- Ensuring that any possible harm is mitigated and risks are categorised.
- Monitoring and evaluation process and maintenance of record.
Complaint Handling System-
As per Para 9 of the Regulation, Performance Review Committee shall maintain a system by which any person may submit to the Committee. Failing in adherence in application of provisions of the Act, misappropriation of resources, abuse of powers by member of the Authority, non-compliance of any decision by member of Authority, the Committee will be entitled to-
- Submit in writing by the person to the Committee
- Committee receiving the complaints will register them and assign the procedure for redressal.
- Committee may seek requisite information or confirmation from the complainant for examining the complaint
- The Authority is of the view that prima-facie the complaint has some merit, it will forward the same to the Authority concerned, for appropriate action in accordance with the applicable laws.
Reporting Requirements–
- The Authority shall forward a copy of report after reviewing. In pursuant to such report to the Central Government within a period of three months from the date of receipt of the report.
- According to Para 10 of the Regulation, the Committee shall submit a consolidated report to the Authority, containing the findings of each review area, in the fixed month of every year.
- The Authority shall take action on the report under sub-regulation (1) in accordance with Section 17(2) of the Act.