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    Question

    As per the recent guidelines, NBFCs in the Middle Layer

    (ML) and Upper Layer (UL) are required to appoint a Chief Compliance Officer (CCO), according to those guidelines what will be the tenure of the CCO?
    A 2 years Correct Answer Incorrect Answer
    B 3 years Correct Answer Incorrect Answer
    C 5 years Correct Answer Incorrect Answer
    D 7 years Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The CCO shall be appointed for a minimum fixed tenure of not less than 3 years. However, in exceptional cases, the Board / Board Committee may relax the minimum tenure by one year, provided appropriate succession planning is put in place. The CCO shall have direct reporting lines to the MD & CEO and/or Board / Board Committee. In case the CCO reports to the MD & CEO, the Board / Board Committee shall meet the CCO at quarterly intervals on a one-to-one basis, without the presence of the senior management, including MD & CEO. The CCO shall not have any reporting relationship with the business verticals. Further, the performance appraisal of the CCO shall be reviewed by the Board / Board Committee. NBFC-UL and NBFC-ML shall put in place a Board approved policy and a Compliance Function, including the appointment of a Chief Compliance Officer (CCO, latest by April 1, 2023 and October 1, 2023, respectively.

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