What changed
RBI issued a Master Circular compiling all existing instructions for SCs and RCs up to June 30, 2007. It includes application procedures for registration, exemptions from Sections 45-IA, 45-IB, and 45-IC of the RBI Act, quarterly statement requirements, and guidelines for declaring Net Asset Value of security receipts.
What it means for you
This circular provides a single reference point for SCs and RCs, simplifying compliance. Banks dealing with these entities can rely on this consolidated guidance for registration and reporting. The NAV disclosure requirement enhances transparency for Qualified Institutional Buyers investing in security receipts.
What you must do
- Review the Master Circular to ensure your SC/RC operations align with consolidated registration and reporting norms.
- Submit quarterly statements on assets acquired, securitized, and reconstructed as per the specified format.
- Disclose Net Asset Value of security receipts at periodic intervals to Qualified Institutional Buyers.
- Refer to the separate Master Circular (DNBS PD CC No.7) for the updated 2003 Guidelines and Directions.
Who it affects
Securitisation Companies registered with RBI, Reconstruction Companies registered with RBI, Qualified Institutional Buyers investing in security receipts, Banks and financial institutions dealing with SCs/RCs
What is the purpose of this Master Circular?
It consolidates all directions and instructions issued to Securitisation Companies and Reconstruction Companies up to June 30, 2007, into a single document for ease of reference.
Are SCs and RCs exempt from any RBI Act provisions?
Yes, registered SCs and RCs are exempt from Sections 45-IA, 45-IB, and 45-IC of the RBI Act, 1934, as per Notification No. DNBS. 3/CGM (OPA)-2003.
What reporting is required from SCs and RCs?
They must submit a quarterly statement on assets acquired, securitized, and reconstructed, and periodically declare the Net Asset Value of security receipts to Qualified Institutional Buyers.