Discovering the path through India’s business regulatory ecosystem can be an intricate journey, comprising 1,536 acts and rules with over 69,000 compliance obligations. The process commences with businesses obtaining essential licenses, permissions, and approvals from relevant authorities across different phases: ‘setting up,’ ‘pre-commissioning,’ ‘post-commissioning,’ and ‘post-production.’
The licenses are pivotal for operating a fintech company in India. These include registrations and certificates under acts like the Contract Labour (Regulation and Abolition) Act, 1970, Employees State Insurance Act, 1948, Central Goods and Services Tax Act, 2017, and State Goods and Services Tax Act, 2017, among others.
Fintech entities engaging in activities like deposit-taking and lending must secure banking or non-banking licenses from the Reserve Bank of India (RBI). Approval from regulatory bodies like RBI, SEBI, or IRDAI is imperative for fintechs involved in various financial offerings. Payment aggregators, as per RBI’s Guidelines for Payment Aggregators and Payment Gateways, must acquire a license. Additionally, businesses dealing with intellectual property in their offerings need licenses from patent holders, unless they are the patent holders themselves.
Publicly traded fintech companies are bound by SEBI (Securities and Exchange Board of India) regulations, especially the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These regulations ensure prompt disclosure of material events and information that can impact the valuation and market reputation of a listed entity.
Regulation 30 mandates the disclosure of material events within 24 hours, while Regulation 29 outlines the intimation timelines for board meetings, financial result discussions, and alterations to securities. Compliance with these regulations demands a thorough understanding and adherence to circulars, directions, advisories, notices, and orders issued by sectoral regulators like RBI and the Ministry of Corporate Affairs.
Conducting compliance applicability assessments is crucial for businesses to gauge the extent of applicable regulations. Keeping abreast of regulatory changes involves monitoring circulars, advisories, and notices from sectoral regulators, as well as tracking over 2,200 government websites for updates.
As businesses navigate this complex regulatory landscape, comprehensive awareness and proactive compliance efforts become integral for sustained success.
