Definition: The Systematically Important Core Investment Company (CIC-ND-SI) is a financial company that is principally engaged in the business of acquisition of shares and securities.
As per the RBI guidelines, the non-banking financial company is recognized as a systematically important core investment company if it satisfies the following conditions:
- At least 90% of the company’s total assets should be in the form of investments in equity shares, preference shares, loan or debt in group companies.
- The investment in equity shares, including all those instruments convertible into equity within a period not exceeding ten years from the issue date, in the group companies, should not be less than 60% of its total assets.
- The company does not trade in investments in shares, debt or loans in group companies except through a block sale in the event of dilution or disinvestment.
- The company does not carry on any other financial activity except for the investment in bank deposits, government securities, money market instruments, loans to and investment in debt issuances of group companies or guarantees issued on the behalf of the group companies.
- The Asset Size of the company shall be Rs 100 Crore and more.
- The company can accept public funds.
Thus, all these conditions must be met by any non-banking finance company to trade in shares and securities business.