New Delhi [India], International Financial Services Center (IFSC) Authority has permitted IFSC banking units registered with SEBI as Foreign Portfolio Investors (FPIs) to issue derivative instruments with Indian securities as underlying assets in GIFT-IFSC A. Is allowed. A derivative is an instrument whose value is derived from the value of one or more underlying assets, which can be commodities, precious metals, currency bonds, stocks, stock indices, etc. This decision has been taken after the earlier announcement made by the Union Finance and Corporate Minister. Matters during the Budget Speech 2023-24. It was announced that offshore derivative instruments (ODIs) issued in GIFT-IFSC will be recognized as valid contracts.Subsequently, an amendment was made to Section 18A of the Securities Contracts (Regulation) Act, 1956, so that derivative contracts issued by FPIs in the IFSC Regulated by the IFSC Authority (IFSCA) could be recognized as legal and valid. Non-bank entities registered as FPIs with IFSC Code, SEB are also permitted to issue derivative instruments with Indian securities as underlying assets in GIFT-IFSC. However, it is mandatory for the entity issuing such derivative instruments to ensure compliance with the requirements of issuance of ODI, as prescribed by SEBI and IFSCA from time to time, in addition, the entity shall furnish the requisite information to the Clearing Corporation in GIFT. Submission is mandatory. IFSC in the prescribed format by the tenth day of every month. This move is expected to increase the scope and depth of financial services offered within the GIFT-IFSC ecosystem, thereby attracting more investors and expanding the scope of permissible activities for FPIs. This will boost overall market activity. In GIFT-IFSC, India aims to strengthen its position as a global financial center and promote greater participation in its financial markets.