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Kush Wadehra

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Principal Associate in the Corporate and Financial Regulatory practice at the Mumbai office of Cyril Amarchand Mangaldas. Kush has represented various Indian and multinational fintech, information/ emerging technology companies, on transactional, enforcement and regulatory matters. His transactional practice focus is on public & private M&A, commercial agreements and regulatory matters. He can be reached at kush.wadehra@cyrilshroff.com

FIG Paper (No. 37 – Series 1) | SEBI Proposes to Introduce ‘New Asset Class’

Background and Key Features:

  • The Securities and Exchange Board of India (“SEBI”) regulates the asset management and wealth management sector through a graded approach in relation to prudential, governance and investment norms, with flexibility given progressively, basis minimum investment threshold. This sector has also seen a significant rise in assets under management (“AUM”) over the last decade:

Continue Reading FIG Paper (No. 37 – Series 1) | SEBI Proposes to Introduce ‘New Asset Class’

FIG Paper No 29 – Data Law Series 3: (Implications of Digital Personal Data Protection Act, 2023, on Asset Management Companies)

Background:

  • Asset Management Companies (“AMCs”) act as fiduciaries of unitholders (i.e. investors who hold units in funds managed by an AMC), due to which the Securities and Exchange Board of India (“SEBI”) has mandated various data privacy obligations for AMCs, either directly or through the Association of Mutual Funds of India (“AMFI”).
  • SEBI, in a private letter to AMCs, AMFI and registrar and transfer agents (“RTAs”) dated July 10, 2020 (“SEBI Letter”), required that digital platforms involved in distribution/ advisory and AMCs/ RTAs must respect unitholder’s data privacy. The letter included the following two mandates:
    • unitholder data should not be shared with group entities having multiple business/ products; and
    • products and services of group companies cannot be cross marketed.

Continue Reading FIG Paper No 29 – Data Law Series 3: (Implications of Digital Personal Data Protection Act, 2023, on Asset Management Companies)

I. Background:

(i) SEBI notified the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2023 (“Amendment”), on June 27, 2023. The Amendment follows a Consultation Paper on Review of Regulatory Framework for Sponsors of a Mutual Fund, which the SEBI had released on January 13, 2023 (“Consultation Paper”).

(ii) The Amendment…

SEBI’s MUTUAL FUND EXPENSE RATIO CONSULTATION PAPER

BACKGROUND

On May 18, 2023, the Securities and Exchange Board of India [“SEBI”] had placed a consultation paper related to the total expense ratio charged by Asset Management Companies [“AMC”] to unitholders of mutual funds. June 8, 2023 was set as the deadline for submission of public comments. The due date, however, was extended to June 8, 2023.

The proposal is aimed at curbing distributor practices such as unnecessary switching of schemes and pushing new fund offerings for higher commissions. SEBI in its consultation paper proposed to introduce performance fees for funds. It proposed two approaches, but also suggested testing the models under the Regulatory Sandbox.Continue Reading FIG Paper (No. 21 – Series 1): SEBI’s Mutual Fund Expense Ratio Consultation Paper: Impact Analysis

FIG Paper

Pursuant to the Report of the Reserve Bank of India (“RBI”) Working Group on Digital Lending, issued on November 18, 2021, and the RBI Press Release on ‘Recommendations of the Working Group on Digital Lending – Implementation’, dated August 10, 2022 (“August Press Release”), the RBI released the Guidelines on Digital Lending on September 2, 2022 (“Guidelines”). Our Alert examines the key changes introduced and industry implications.Continue Reading FIG Paper (No. 17 – Series 2) – New Digital Lending Guidelines – Industry Implications

FIG Paper

Background:

A Working Group on Digital Lending (“RBI WG”), constituted by the Reserve Bank of India (“RBI”), had published its Report in November 2021. It had made recommendations on (i) the legal and regulatory framework for digital lending; (ii) technology; and (iii) financial consumer protection, implementable over the near-term (up to one year) and medium-term (beyond one year).Continue Reading FIG Paper (No. 16 – Series 1) – Impact Analysis of RBI’s Recommendations of the Working Group on Digital Lending – Implementation

Payment System Operators New M&A Implications

Background:

On July 4, 2022, the Reserve Bank of India (“RBI”) clarified to all banks and non-bank payment system operators (“PSOs”) that its prior approval would be required for any (a) takeover/ acquisition of control, which may or may not result in change of management; and (b) sale/ transfer of payment activity to an entity not authorised for undertaking similar activity (“Circular”).Continue Reading FIG Paper (No. 15 – Series 1) – Payment System Operators (PSOs) – New M&A Implications

RBI guidance on loading of PPIs through credit lines

On June 20, 2022, the Reserve Bank of India (RBI) clarified to authorised non-bank prepaid payment instrument (PPI) issuers that PPIs may not be loaded from credit lines, and any such practice should be stopped immediately.Continue Reading FIG Paper (No. 13) – RBI guidance on loading of PPIs through credit lines