Regulatory Framework for Compliance Function and Chief Compliance Officer in NBFC-UL and NBFC-ML

The Reserve Bank of India (RBI) has prescribed a comprehensive compliance framework for Non-Banking Financial Companies (NBFCs) classified under the Upper Layer (NBFC-UL) and Middle Layer (NBFC-ML). This framework emphasizes the establishment of a dedicated Compliance Function and the appointment of a Chief Compliance Officer (CCO) to ensure regulatory adherence, effective compliance risk management, and…

Framework for Scale-Based Regulation of NBFCs: Structure, Implications, and Clarifications

The Scale-Based Regulatory (SBR) framework, introduced by the Reserve Bank of India (RBI), marks a significant shift in the regulation and supervision of Non-Banking Financial Companies (NBFCs). This approach aligns regulatory intensity with the size, activity, and risk profile of NBFCs, thereby promoting a more calibrated and proportionate oversight mechanism. On October 19, 2023, the…

Compliance Function and the Role of the Chief Compliance Officer in NBFCs

In Non-Banking Financial Companies (NBFCs), the compliance function plays a pivotal role in ensuring adherence to all applicable statutory and regulatory requirements. It encompasses key areas such as market conduct, conflict of interest management, fair treatment of customers, and the appropriateness of products and services offered. The function is overseen by the Chief Compliance Officer…