CLARIFICATION ON CORE INVESTMENT COMPANIES (CICs)

In continuation of Regulatory Framework on Core Investment Companies (CICs) dated August 12, 2010; Reserve Bank of India (RBI) recently has issued Notifications dated January 05, 2011 covering loopholes left open in the earlier issued framework. Out result of these notifications shall be that, direction contained in these notifications shall prevail to the extent guidelines as referred to in earlier issued regulatory framework are inconsistent with these notification.

The major highlights of the regulatory framework are:

1. Reintroduction of relevant concepts with slight modification

2. Redefined transition phase

3. Necessary obligations for all CIC-ND-SI

4. Exemption in time for compliance with the Directions

5. Non applicability of certain Directions

6. Our Observations