Alerts & Updates 10th Dec 2024
The International Financial Services Centres Authority (IFSCA) has issued a circular dated December 02, 2024, bearing reference F. No. IFSCA-LPRA/3/2024-Legal and Regulatory Affairs regarding Complaint Handling and Grievance Redressal by Regulated Entities in the IFSC (IFSCA December Circular).
The IFSCA December Circular states that it shall apply to all entities regulated by IFSCA dealing with any Consumer other than their Group Entities (Regulated Entities). The IFSCA December Circular provides that the term “Consumer” shall have the same meaning as assigned to “Client” or “Customer” under clause 1.3.11 of the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022, which states that a “Customer” or “Client” shall mean a person who is engaged in a financial transaction or activity with a Regulated Entity and includes a person on whose behalf the person engaged in the transaction or activity, is acting.
The IFSCA December Circular also exempts from its application the following: foreign universities, foreign educational institutions, ancillary service providers, BATF[1] service providers, finance companies or finance units engaged in aircraft leasing or ship leasing and global/regional corporate treasury centres in the IFSC.
The IFSCA December Circular is scheduled to come into force on January 15, 2025, by which time all entities to whom the IFSCA December Circular applies should have aligned their complaint handling procedures with the IFSCA December Circular.
The IFSCA December Circular now mandates every Regulated Entity to have a policy for the handling of complaints and grievance redressal (CGR Policy). The CGR Policy shall have adequate mechanisms for receiving, handling and redressal of complaints in a fair, transparent and timely manner.
Regulated Entities have been given the freedom to define in their CGR Policy what constitutes a ‘complaint’, depending upon the nature of financial products and services undertaken by the Regulated Entity in the IFSC. Schedule-I of the IFSCA December Circular has an indicative list of matters not considered as ‘complaint’. Thus, for example, an anonymous complaint shall not be considered a complaint.
The CGR Policy shall be duly approved by Regulated Entity’s governing body or its Board of Directors and prominently disclosed on the website of the Regulated Entity or on a dedicated webpage of its Group Entity, as applicable, under the heading “Complaint Handling and Grievance Redressal”. The name and contact details of the Complaint Redressal Officer (CRO) and the Complaint Redressal Appellate Officer (CRAO) shall also be prominently displayed under this section.
On receipt of a complaint, the CRO of the Regulated Entity shall make an assessment on the merits of the complaint and either accept or reject the complaint. Acceptance has to be acknowledged in writing within 3 working days of receipt of the complaint and non-acceptance has to be notified to the complainant within 5 working days.
A Regulated Entity is required to either resolve the complaint or reject it, preferably within 15 days acceptance of complaint, but no later than 30 days of acceptance. If the Regulated Entity rejects the complaint, it shall give reasons for rejection of the complaint, in writing.
If a complainant is not satisfied with the resolution provided or if the complaint has been rejected, the complainant may file an appeal before the CRAO of the Regulated Entity preferably within 21 days from the receipt of the decision from the CRO. If a complainant is not satisfied with the decision of the Regulated Entity and has exhausted the appellate mechanism of the Regulated Entity, the complainant may file a complaint before the IFSCA, preferably within 21 days from the receipt of the decision from the Regulated Entity. Such appeal may be sent by email to: grievance-redressal@ifsca.gov.in
Please find here a link to the IFSCA December Circular
We hope you have found this information useful. For any queries/clarifications please write to us at insights@elp-in.com or write to our authors:
Vinod Joseph, Partner – Email – vinodjoseph@elp-in.com
Paridhi Jain, Associate – Email – paridhijain@elp-in.com
[1] Service Providers of (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services who are regulated by the IFSCA (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services) Regulations, 2024.
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