Photo of Gazal Rawal

Partner Designate in the Financial Regulatory Practice at the Mumbai office of Cyril Amarchand Mangaldas. Gazal has advised a number of financial institutions on a wide range of matters and her expertise lies in transaction advisory in financial services space with special focus on non-banking entities and securities market intermediaries. She has also advised on regulatory representations as well as internal regulatory investigations conducted by financial services entities. She can be reached at gazal.rawal@cyrilshroff.com

Revised Framework for Core Investment Companies – Tightening the Screws

Introduction

The Reserve Bank of India (“RBI”) has modified the regulatory landscape applicable to core investment companies (“CICs”), as per its circular dated August 13, 2020 (“Revised Framework”), in order to ensure stability of the financial system and address systemic risks posed by inter-connectedness of CICs and their group companies. In contrast to the light-touch regulation issued exactly a decade ago on August 12, 2010, the Revised Framework imposes far more stricter norms.

In furtherance to its announcement in the Statement on Development and Regulatory Policies issued on June 6, 2019, along with the Second Bi-Monthly Monetary Policy for the year 2019-20, the RBI constituted a working group under the chairmanship of Mr. Tapan Ray (non-executive chairman, Central Bank of India and former secretary, Ministry of Corporate Affairs) (“Working Group”) to review the regulatory and supervisory framework applicable to CICs. The Working Group issued its report in November 2019 and the Revised Framework has now been issued based on the recommendations of the Working Group.
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