Guidelines on Corporate Governance and Disclosure Requirements for a Finance Company

Last updated: 11 August 2021

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Quick Summary

This circular provides essential guidelines on corporate governance and disclosure requirements for Finance Companies operating within the International Financial Services Centre (IFSC). These guidelines aim to enhance accountability, transparency, and sustainability, thereby boosting investor confidence and supporting long-term business objectives. They are supplementary to existing requirements under the Companies Act, 2013.

International Financial Services Centres Authority CIRCULAR F. No 172/ IFSCA/Finance Company Regulations/2021-22/9 August 09, 2021 To, All Finance Companies in the International Financial Services Centre (IFSC) Subject: Guidelines on Corporate Governance and Disclosure Requirements

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FAQ :

The purpose is to ensure accountability, transparency, and sustainability for Finance Companies, fostering investor confidence and achieving long-term sustainable business goals.

Generic guidelines apply to all Finance Companies registered with the Authority. Detailed guidelines apply to those undertaking specific core or specialised activities as outlined in the Schedule.

Finance Companies must establish systems to ensure Board members meet 'fit and proper' criteria based on qualifications, expertise, track record, and integrity. Due diligence must be conducted at appointment and regularly thereafter.

Information such as annual operating plans, budgets, quarterly results, minutes of committee meetings, changes in directors, materially adverse events, significant transactions, and breaches of internal policies must be placed before the Board.

The company's website should include basic information about the company and its group, the Annual Report, a Corporate Governance report, and any other significant information.

In addition to Companies Act requirements, disclosures on components of owned funds, off-balance sheet exposures, asset-liability profile, parent company financing, business ratios (RoE, RoA), NPA concentration, provisioning, regulatory registrations, and imposed penalties are required.