The Securities and Exchange Board of India, (SEBI) on July 19, 2024, issued a notification regarding the enabling ESG Rating Providers (ERPs) to undertake ESG rating activities under IFSCA.
In accordance with Para 7.1 of the Master Circular for ERPs dated May 16, 2024, states that ERPs may undertake or offer ESG ratings of any product or issuer as required by another financial sector regulator or authority, following their guidelines. To facilitate ERPs in conducting ESG rating activities within the International Financial Services Centre - Gujarat International Finance Tech-city (IFSC-GIFT City), the International Financial Services Centres Authority (IFSCA) is now included in the list of financial sector regulators/authorities specified in Annexure 4 of the aforementioned Master Circular for ERPs.
In line with this provision, it is specified that ESG ratings performed by an ERP under IFSCA guidelines shall fall under IFSCA's jurisdiction. Accordingly:
•Any issues arising from the activities of SEBI-registered ERPs in the IFSC will be addressed by IFSCA under the powers exercisable under Sections 12 and 13 of the IFSCA Act, along with associated regulations and instructions.
•IFSCA will handle complaints, enforcement actions, and the provision of information to third parties, including statutory or judicial bodies, concerning the services provided by ERPs in the IFSC.
[Notification No. SEBI/HO/DDHS/DDHS-POD3/P/CIR/2024/103]
