{"id":26768,"date":"2019-11-21T19:01:10","date_gmt":"2019-11-21T13:31:10","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=26768"},"modified":"2019-11-25T14:29:55","modified_gmt":"2019-11-25T08:59:55","slug":"new-guidelines-for-core-investment-companies","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/new-guidelines-for-core-investment-companies\/","title":{"rendered":"RBI Releases New Recommendations for Core Investment Companies (CICs)"},"content":{"rendered":"<p style=\"text-align:center\"><strong>The Working Group Committee constituted by RBI has recommended the constitution of Board Level Committees such as Audit Committee, Nomination and Remuneration Committee, Group Risk Management Committee for Core Investment Companies (CICs).<\/strong><\/p>\n\n\n\n<p class=\"has-drop-cap\">On July 03, 2019, The Reserve Bank of India had constituted a Working Group (WG) to Review Regulatory and Supervisory Framework for Core Investment Companies (CICs). Shri Tapan Ray, former Secretary, Ministry of Corporate Affairs, Government of India was declared as the Chairperson of the Working Group. Earlier in August 2010, RBI had introduced a separate framework for the regulations of systematically important Core Investment Companies (CICs), recognising a difference in the <strong><a href=\"https:\/\/enterslice.com\/learning\/nbfc-business-model\/\">business model<\/a><\/strong> of a holding company relative to other NBFCs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a Core Investment Company (CIC)?<\/h2>\n\n\n\n<p>CICs are Non-Banking Financial Companies with asset\nsize of Rs. 100 crore and above which carries on the business of acquisition of\nshares and securities. These Companies hold more than 90 % of its net assets in\nthe form of investment in equity shares, preference share, bonds, debentures,\ndebt or loans in group companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The reason why RBI constituted a Working Group (WG) for Core Investment\nCompanies (CICs) <\/h2>\n\n\n\n<p>RBI saw a need to strengthen the corporate\ngovernance framework of Core Investment Companies (CICs) and hence decided to\nconstitute a six-member Working Group (WG) headed by Shri.Tapan Ray. The main\nguidelines of the working group included the examination of the current\nregulatory framework for CICs in terms of adequacy, efficacy and effectiveness\nof every component and therefore, suggest changes.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">&nbsp;The key recommendations given by the\nWorking Group for Core Investment Companies (CICs) &nbsp;are as follows :<\/h2>\n\n\n\n<ul><li>The Working group suggests that step\ndown CICs may not be allowed to invest in any other CIC while enabling them to\ninvest freely in other group companies. Apart from this, the committee also suggests\nthat the capital contribution by a CIC in a step-down CIC, over and above 10%\nof its funds, should be deducted from its adjusted net worth, as applicable to\nother NBFCs.<\/li><li>The Working group recommends that the\nnumber of layers of CICs in a group should be restricted to two. It further\nsuggests that any CIC within a group shall not invest more than a total of two\nlayers of CICs, including itself.<\/li><li>To strengthen the governance practices,\nthe Working Group Committee mandates the constitution of the Board Level\nCommittees, namely audit committee, nomination and remuneration committee and\ngroup risk management committee.<\/li><li>At present, CICs are not required to\nsubmit off-site returns or Statutory Auditors Certificate (SAC). However, the\nWorking Group Committee suggested that RBI may design the offsite returns and\nprescribe it for CICs on the lines of other NBFCs. The committee further recommended\nthe annual submission of Statutory Auditors Certificate (SAC).<\/li><li>The Working Group also suggested a\nperiodic, onsite inspection of CICs.<\/li><\/ul>\n\n\n\n<p><strong>NOTE<\/strong>: All these recommendations put forward by the Working Group will have to be implemented by Core Investment Companies (CICs) if the <a href=\"https:\/\/www.rbi.org.in\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Reserve Bank of India (opens in a new tab)\">Reserve Bank of India<\/a> (RBI) decides to accept these suggestions. The Working Group has placed the above report on the RBI website for comments of stakeholders and members of the public. Comments on the report may be sent by November 30, 2019, through e-mail.<\/p>\n\n\n<a href=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/11\/PR111800E4908686774E099222BD2AAE3C84DF.pdf\" class=\"pdfemb-viewer\" style=\"width: 767px; \" data-width=\"767\" data-height=\"max\" data-toolbar=\"bottom\" data-toolbar-fixed=\"on\">PR111800E4908686774E099222BD2AAE3C84DF<br><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Working Group Committee constituted by RBI has recommended the constitution of Board Level Committees such as Audit Committee, Nomination and Remuneration Committee, Group Risk Management Committee for Core Investment Companies (CICs). On July 03, 2019, The Reserve Bank of India had constituted a Working Group (WG) to Review Regulatory and Supervisory Framework for Core [&hellip;]<\/p>\n","protected":false},"author":26,"featured_media":26776,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1533],"tags":[],"acf":{"service_id":"198"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>RBI Releases New guidelines for Core Investment Companies (CICs)<\/title>\n<meta name=\"description\" content=\"The Working Group Committee constituted by RBI has recommended guidelines to strengthen the corporate governance framework of Core investment Companies.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/new-guidelines-for-core-investment-companies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RBI Releases New guidelines for Core Investment Companies (CICs)\" \/>\n<meta property=\"og:description\" content=\"The Working Group Committee constituted by RBI has recommended guidelines to strengthen the corporate governance framework of Core investment Companies.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/new-guidelines-for-core-investment-companies\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-11-21T13:31:10+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-11-25T08:59:55+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/11\/RBIs-panel-releases-new-rules-for-CICs.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Shubham Chauhan","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/10\/IMG_20191011_160437__01.jpg","authorDescription":"A passionate legal content writer, a nature enthusiast, an avid reader, and a part-time thinker. By means of conducting in-depth research on industry related topics, Shubham often builds flawless and intelligible legal content for populace from all walks of life.","postViews":443,"readingTime":2,"nextPost":{"id":26791,"slug":"last-date-for-filing-gstr-9-and-gstr-9c-extended"},"prevPost":{"id":26762,"slug":"appointment-of-alternate-director"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/11\/RBIs-panel-releases-new-rules-for-CICs.jpg","postTerms":"Core Investment Company","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/26768"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=26768"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/26768\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/26776"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=26768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=26768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=26768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}