Regulation 3 defines terms governing registration of Factors and assignments of receivables, including Factor, Finance Company, Central Registrar, Central Registry, International Financial Services Centre, International Trade Financing Services platform and Trade Receivables Discounting System. Key managerial personnel follows the Companies Act meaning, subject to additional persons designated by a Factor. Relevant Person includes key managerial personnel and persons exercising control over the Factor. Undefined expressions adopt their meanings under the specified governing enactments and related rules or regulations.

Factor registration and assignment-of-receivables filing cover the grant of certificates of registration to Factors and filing of transaction particulars with the Central Registry. A Trade Receivable Discounting System (TReDS) files such particulars on behalf of Factors under the prescribed statutory mechanism.

Registration of factors and assignments of receivables within the International Financial Services Centres Authority regime is addressed through the International Financial Services Centres Authority (Registration of Factors and Registration of Assignment of Receivables) Regulations, 2024. Statutory authority derives from the International Financial Services Centres Authority Act, 2019, and the Factoring Regulation Act, 2011. Commencement is fixed as the date of publication in the Official Gazette.

KRAs must protect Client interests, maintain integrity and due diligence, provide timely grievance redressal, and preserve confidential Client information except where disclosure is legally required. They must maintain internal controls and operational capability to protect Clients against fraud and misconduct, ensure effective compliance and corporate governance, and use automated validation mechanisms to ensure data accuracy. KRAs must not engage in false-market creation, price rigging, market manipulation, sharing unpublished price-sensitive information, or fraudulent manipulation of Client KYC processes.

Implementation of KYC Registration Agency regulations may be supported by norms, procedures, processes and additional requirements specified by the Authority through circulars, guidelines or directions, including matters incidental to implementation.

The Authority may relax strict enforcement of KYC Registration Agency requirements to support development of the IFSC financial services market, provided written reasons are recorded. Applicants must provide details and grounds for relaxation and pay the prescribed non-refundable fee. Complete applications, including responses to clarifications, must be processed within thirty days, with reasons recorded for acceptance or refusal.

Regulation 33 confers on the Authority a power to remove difficulties arising in the interpretation or application of the International Financial Services Centres Authority (KYC Registration Agency) Regulations, 2025. This power is exercisable by issuing directions through guidance notes or circulars. Directions may address difficulties associated with interpreting or applying the regulations.

The Authority may require a KYC Registration Agency to furnish any information, documents or records, enabling regulatory access to material held by the agency for oversight and compliance purposes.

Contravention by a KYC Registration Agency (KRA) of applicable regulations, guidelines, circulars, or directions attracts enforcement action under the Act, including suspension or cancellation of registration. Before any such action is taken, the KRA must receive a reasonable opportunity to make submissions, ensuring that enforcement for regulatory default is preceded by procedural fairness.

Inspection reporting under the KYC Registration Agency Regulations requires the Inspecting Authority to submit an inspection report, including interim reports, to the Authority for regulatory consideration. The Authority may take fit and appropriate action on the basis of the report. When directed by the Authority, the Inspecting Authority may submit an interim report as directed.

Third-party inspection authorises the Authority to appoint a professional to inspect a KYC Registration Agency's books of account, records, documents, infrastructure, systems, procedures or affairs. The professional has the powers of an Inspecting Authority, while the KRA and its employees have equivalent inspection-related obligations. The Authority may recover all inspection expenses, including the professional's fees, from the KRA.

Regulation 28 requires a KYC Registration Agency and its Principal Officer, directors, chairperson, CEO, key managerial personnel, officers, employees and agents to cooperate with inspections. They must provide assistance, books of account, records, documents, statements and activity-related information within the required time. The KRA must allow reasonable premises access, facilitate examination of relevant material, provide copies, and enable examination or recording of statements.

KYC Registration Agencies may be inspected to verify record maintenance, regulatory compliance, internal controls, safeguards, and continuing fitness or eligibility. Inspection may also examine complaints concerning KRA activities and matters considered necessary for investor or IFSC financial market interests. Prior notice is ordinarily required, but may be dispensed with for recorded reasons where investor interests warrant immediate inspection.

A KRA may allow Authority-specified entities regulated by other financial sector regulators to access its systems for undertaking client KYC. It may also connect with a central KYC registry authorised by the Central Government for collating and sharing KYC information within the financial sector.

Regulated Entities must conduct initial client KYC and due diligence, authenticate and upload KYC information and scanned records, and retain physical KYC documents. Changes in KYC particulars or status require updated uploads and retention of supporting documents. KYC data may be used only for its intended purpose and cannot be shared for commercial gain. Each Regulated Entity retains ultimate responsibility for client KYC, must apply risk-proportionate enhanced measures, and integrate systems for seamless KYC document exchange.

KYC Registration Agencies must maintain interoperable and secure systems for KYC records, including electronic connectivity, secure data transmission, independent validation, record storage and retrieval, and dissemination of client updates to relevant intermediaries. They must protect records against loss, tampering and unauthorised access, maintain separate backups, conduct periodic control and system audits, rectify deficiencies, and comply with data protection requirements. Access by regulated entities must be limited to their own clients' records and require client consent, while all KYC record uploads, modifications and downloads must be auditable.

KYC Registration Agencies must receive a Client's KYC documents from the Regulated Entity in accordance with the Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer Guidelines, related circulars and directions, and other relevant prevention-of-money-laundering legislation. The duty links KRA document receipt to the applicable KYC and anti-money-laundering regulatory framework.

KYC Registration Agencies must undergo an annual compliance audit conducted by specified qualified professionals or a person authorised to audit in a foreign jurisdiction. The audit report for each financial year must be furnished to the Authority by 30 September of the following year. Additional audits and reports must be undertaken where specified by the Authority.

KYC Registration Agencies operating within International Financial Services Centres must pay fees specified by the Authority. Every KRA is subject to this payment obligation, and the Authority determines the applicable fees through its specifications. Payment is required in accordance with those fee requirements, which identify the fees payable by KYC Registration Agencies within the regulatory framework.

Regulation 20 requires a KYC Registration Agency established as a company in an IFSC to obtain the Authority's prior approval for any direct or indirect change in control. A KRA operating through an IFSC branch must intimate the Authority of any direct or indirect change in control within fifteen days.