IFSCA has issued the framework for aircraft operating lease

Feb 22, 2021 | by Avantis RegTech Legal Research Team

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Industry Specific Compliance

The International Financial Services Centres Authority (IFSCA) on February 19, 2021 has issued the framework for aircraft operating lease. This framework shall apply to all the entities engaging in one or more of the permissible activities under this framework.

The following guidelines have been given: 

• An applicant entity desirous of setting-up operations in IFSCs as a lessor and undertake permissible activities shall meet the following eligibility criteria:

1. The entity shall set-up operations in an IFSC in India by way of a Company or a Limited Liability Partnership or a Trust or in any other form as may be specified by the IFSCA.

2. The person(s) in control of the aforesaid entity shall be located in a Financial Action Task Force compliant jurisdiction. 

3. The entity shall deploy resources in such IFSC commensurate with the business operations under this framework.

4. The entity shall comply with capital requirement as required under this framework.

• A minimum capital of USD 2,00,000 or its equivalent in freely convertible foreign currency, is to be maintained at all times by the entity. 

• If required, as a risk management measure, IFSCA may prescribe maintenance of additional capital, based on the nature and scale of business of the entity. 

• No applicant shall act as a lessor in an IFSC in India unless it has obtained a certificate of registration from the IFSCA under this framework. 

• Lessors shall transact in freely convertible foreign currency only. However, the lessors may defray their administrative expenses in INR by maintaining a separate INR account.

• Every lessor registered under this framework shall comply with all other applicable statutory obligations, regulatory requirements, standards, policies, directions and guidelines.

• If a lessor fails to fulfil the conditions subject to which the registration is granted, the IFSCA may take any action as it may deem fit, after giving an opportunity of making submissions, if any. 

[Notification No. No. 28/IFSCA/ALF/2020-21]

 


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