SEBI Allows ESG And Credit Rating Activities In IFSC-GIFT City

SEBI has authorized credit rating agencies (CRAs) and ESG rating providers (ERPs) to operate within the International Financial Services Centre (IFSC) at Gujarat International Finance Tech-City (GIFT City), under the jurisdiction of the International Financial Services Centres Authority (IFSCA). 

This move aims to strengthen the financial ecosystem at IFSC-GIFT City. SEBI’s recent circular includes IFSCA among the recognized financial sector regulators, enabling SEBI-registered CRAs and ERPs to conduct their rating activities within the IFSC-GIFT City framework.

Under IFSCA guidelines, ESG ratings conducted by ERPs will now be overseen by IFSCA. This ensures that IFSCA will address any issues arising from the operations of these CRAs and ERPs within the IFSC. IFSCA will manage complaints concerning ERP services within the IFSC, including taking enforcement actions and providing information to third parties such as statutory or judicial bodies.

The authorization for ERPs to undertake ESG rating activities within IFSC is formalized under Regulation 28E(d) of SEBI (Credit Rating Agencies) Regulations, 1999, and Para 7.1 of the Master Circular for ERPs dated May 16, 2024. The inclusion of IFSCA as a financial sector regulator, as per Annexure 4 of the Master Circular for ERPs, extends this authorization specifically to the IFSC.