The Ministry of Electronics and Information Technology (MeitY) has released the “Report on AI Governance Guidelines Development,” for public consultation on January 09, 2025. This report addresses India’s need for robust and inclusive AI governance, emphasising on innovation and ethical use of AI technologies.
HIGHLIGHTS:
- The report emphasizes a whole-of-government strategy, along with the coordinated efforts from ministries and regulators to address AI’s opportunities and risks effectively.
- Recommendations include creating a structured AI governance system to ensure trustworthiness, accountability, and ethical development of AI technologies.
- The Ministry has launched a second Expression of Interest (EoI) for Safe and Trusted AI projects, covering themes like watermarking, ethical AI frameworks, deepfakes detection tools.
- The Ministry has invited public suggestions on the report to refine policy and enhance the AI governance in India ensuring that India’s AI policy reflects its unique socio-economic and cultural context. The last date for providing feedbacks is January 27, 2025.
Measures For ESG Rating Providers
The Securities and Exchange Board of India (SEBI) has proposed changes to the SEBI (Credit Rating Agencies) Regulations, 1999, to enhance the operations of ESG Rating Providers (ERPs) as part of its Ease of Doing Business initiative. These amendments aim to improve transparency, reduce conflicts of interest, and address challenges faced by ERPs, especially those using the subscriber-pays model.
Key changes include a requirement for ERPs to share ESG rating reports with both subscribers and issuers simultaneously. Issuers and their associates will be prohibited from subscribing to their own ratings. Additionally, ratings must be based on publicly available data.
SEBI also plans to clarify the definitions of “group companies” and “associates” and give issuers a two-day window to comment on draft reports, which will be incorporated into the final ratings. ERP associations will collaborate with SEBI to create a standardized feedback format. The revisions are designed to strengthen India’s sustainable finance efforts, provide operational clarity for ERPs, and enhance the credibility of ESG ratings.
Consultation Paper On SPV Framework For Co- Investment And Leverage Transactions
A consultation document detailing a suggested framework for Special Purpose Vehicles (SPVs) under the Fund Management Regulations, 2022, has been published on 9th January 2025 by the IFSCA. This framework seeks to promote expansion of the alternative investment sector and enhance ease of doing business by facilitating leverage transactions and encouraging co-investment opportunities within IFSCs.
HIGHLIGHTS:
- Fund Management Entities (FMEs) that are IFSCA-registered are permitted to establish SPVs. At least 50% of these SPVs must be owned by a “Controlling Scheme”—a main fund that is managed by the FME.
- SPVs are only allowed to invest in one portfolio firm. For the sake of corporate reorganization but some exceptions can be made out.
- SPVs must follow existing disclosure, valuation, and reporting standards outlined in the Fund Management Regulations.
- Any borrowing by the SPV must adhere to the leverage limits defined in the Private Placement Memorandum (PPM) of the Controlling Scheme.
- The framework covers decision-making authority, mechanisms for dispute resolution, and adherence to regulatory obligations.
Stakeholders are encouraged to provide feedback on this proposal by January 31, 2025. The initiative aims to support the growth of investment activities in IFSCs while ensuring transparency and regulatory compliance.
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