The International Financial Services Centres Authority (IFSCA) on October 30, 2024, notified the Framework for ESG Ratings and Data Products Providers in the IFSC.
The rise in Environmental, Social, and Governance (ESG) Ratings and Data Products Providers (ERDPPs) is driven by global sustainability targets and regulatory requirements. The International Organization of Securities Commissions (IOSCO) issued a report in 2021 with recommendations for regulating ERDPPs, followed by a voluntary Code of Conduct in 2023. In India, SEBI’s July 2024 circular enabled SEBI-registered ESG Rating Providers to operate in the International Financial Services Centre (IFSC), and IFSCA’s subsequent circulars expanded the scope for Credit Rating Agencies to provide ESG ratings.
Now, the IFSCA has designated ESG Ratings and Data Products Providers as intermediaries under the Capital Market Intermediaries Regulations, 2021, requiring entities seeking to offer ESG services from the IFSC to register under these regulations. SEBI-registered ERPs wishing to operate in the IFSC must apply to the IFSCA, with applications submitted in a specified format and accompanied by a non-refundable fee.
[Notification No. IFSCA-PLNP/12/2024-Capital Markets]
