Recognition as a stock exchange, clearing corporation or depository may be granted after the Authority considers the application and is satisfied that the applicant meets the prescribed conditions and eligibility requirements. The Authority may attach appropriate conditions to recognition. A recognised market infrastructure institution must also comply with additional conditions imposed from time to time.

Recognition applicants must be companies limited by shares, demutualised, fit and proper, and compliant with ownership, governance, net-worth, capability and infrastructure requirements. Stock exchanges require electronic trading, real-time surveillance, member regulation, investor grievance and arbitration mechanisms, information dissemination, and business-continuity systems. Clearing corporations require timely settlement infrastructure, risk management, settlement guarantees, connectivity, real-time controls and dispute-resolution arrangements. Depositories must maintain secure communications and data systems, controlled access, operational procedures, offsite backups and insurance-backed indemnification for beneficial-owner losses.

Input tax credit on tax paid through DRC-03 depends on the applicable demand provision and the underlying transaction. Section 17(5)(i) blocks credit of tax paid under sections 74, 129 and 130, but does not list section 73. Payment under section 73 is not automatically barred, although credit must independently satisfy the conditions under sections 16 and 17. DRC-03 payment does not itself create ITC entitlement.

Recognition of a depository in an IFSC requires the application to include a copy of the depository's draft bye-laws as part of the recognition process.

Recognition applications for a stock exchange or clearing corporation in an IFSC must include copies of the memorandum of association, articles of association, bye-laws and other prescribed documents. The accompanying material is governed by the SCRA, applicable rules and the Market Infrastructure Institutions Regulations.

Recognition of a market infrastructure institution in an IFSC requires an application to the Authority in the prescribed form and manner, accompanied by the fee prescribed by the Authority.

Recognition as a market infrastructure institution in an IFSC requires the applicant to be a company incorporated in the IFSC and to comply with prescribed shareholding requirements.

Recognition is mandatory for any person seeking to conduct, organise, or assist in organising a stock exchange, clearing corporation, or depository in an IFSC. Such activities may be undertaken only after obtaining recognition from the Authority in accordance with the applicable regulations.

Definitions govern recognised market infrastructure institutions in an International Financial Services Centre, including stock exchanges, clearing corporations and depositories. Associate status covers control relationships, significant voting control, corporate relationships, relatives, Hindu Undivided Family membership, and circumstances involving control, independence or conflicts of interest. Foreign jurisdiction eligibility depends on recognised regulatory cooperation and the absence of specified Financial Action Task Force deficiencies. Netting offsets settlement obligations to determine net claims or liabilities, while novation makes recognised clearing corporations legal counterparties to trades.

International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021 are made under the International Financial Services Centres Authority Act, the Securities Contracts (Regulation) Act and the Depositories Act. They come into force on the thirtieth day after publication in the Official Gazette.

Minimum owned fund requirements classify finance companies by non-core, core, and Global or Regional Corporate Treasury Centre activities. Non-core-only entities must meet the higher applicable threshold and may receive exemptions subject to a Board-approved prudential policy and fit and proper criteria. Entities undertaking core activities must maintain the higher applicable capital threshold without exemptions. Global or Regional Corporate Treasury Centres must meet the higher applicable threshold and may receive a conditional exemption subject to prudential policy and fit and proper compliance.

Failure by a Finance Company or Finance Unit to fulfil conditions attached to registration permits the Authority to take appropriate action, including suspension, withdrawal, or cancellation of registration. Before taking such action, the entity must be given an opportunity to make submissions.

Regulation 10 authorises the Authority to issue circulars or guidelines prescribing norms, procedures, processes, modes and permissible relaxations for implementing the Finance Company Regulations, addressing incidental matters, and facilitating or regulating permitted financial services. Applicant entities, Finance Companies and Finance Units must pay fees and charges as specified by the Authority.

Every Finance Company and Finance Unit must furnish operational information to the Authority in the manner, at intervals, and in the form specified by the Authority. Financial reporting submitted to the Authority must be in US Dollar unless otherwise specified by the Authority.

Every Finance Company and Finance Unit must comply with Authority-specified corporate governance and disclosure guidelines. Mergers, acquisitions, takeovers, or management changes affecting control of a Finance Company require prior approval where they alter control of share capital or business decisions under an agreement. Parent-level changes concerning a Finance Unit require registration compliance and intimation to the Authority.

Every Finance Company and Finance Unit must comply with Know Your Customer norms, measures to combat financing of terrorism, anti-money laundering obligations, and reporting requirements applicable to a Banking Unit in IFSCs.

Currency of operations for a Finance Company or Finance Unit must be conducted in freely convertible foreign currency with persons permitted by the Authority. Permitted INR-denominated transactions must be settled in freely convertible foreign currency. An INR account may be maintained from such foreign currency for administrative, statutory and other authorised purposes. Balance sheets must be maintained exclusively in United States Dollars, and a Finance Unit must keep its transaction accounts separate from those of its parent.

Finance Companies and Finance Units may undertake specified core and non-core financial activities subject to prescribed conditions, registrations and activity-specific frameworks. Non-core activities must be conducted through separately identifiable departments, with firewalls preventing conflicts of interest and Board-approved grievance-redressal and customer-compensation policies. Transactions may be undertaken with residents and non-residents, subject to foreign-exchange law for resident dealings. Derivatives by entities carrying out non-core activities are limited to hedging underlying exposures, and speculative transactions may neither be undertaken nor funded.

For liquor businesses whose books of account are unavailable, profit estimation may be based on reported sales where those sales represent actual turnover and no independent evidence establishes suppressed sales. Estimating turnover by applying a gross-profit margin to the cost of goods sold is not appropriate in those circumstances. Comparable liquor-trade assessments support estimating profit at 5% of goods put to sale, applied to reported sales rather than an artificially enhanced turnover.

Finance Companies and Finance Units must comply with prudential requirements specified by the Authority, including a minimum capital ratio of regulatory capital to risk-weighted assets. They must maintain a liquidity coverage ratio on a stand-alone basis, subject to approved parent-entity maintenance for a Finance Unit. Aggregate exposure to a single counterparty or connected counterparties is limited to twenty-five per cent of the available eligible capital base without approval. Operational guidelines govern implementation.