Is welcoming fine conditions (3)
I believe the answer is:
'conditions' is the definition.
(if can mean a condition)
'is welcoming fine' is the wordplay.
'welcoming' means one lot of letters goes inside another (in sense of 'inviting in').
'fine' becomes 'f' (abbreviation in pencil classifications).
'is' enclosing 'f' is 'IFS'.
(Other definitions for ifs that I've seen before include "Suppositions, may be accompanied by buts" , "If . . . and ands were pots and pans" , "No ...,ands or buts, no argument allowed" , "Conditional conjunctions" , "Conditions or suppositions, may join with buts" .)