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Amended By Reviewed By AL MEEZAN INVESTMENT MANAGEMENT LIMITED RISK MANAGEMENT POLICIES AND PROCEDURES MANUAL Confidential Al Meezan Investment Management Limited Risk Management Policies Procedures Manual i Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Table of Contents Chapter Particulars Page No. 1 DEFINITIONS ............................................................................................. 1 1.1 Market Risk ..................................................................................... 2 1.1.1 Equity Price Risk................................................................. 2 1.1.2 Interest Rate Risk ............................................................... 3 1.2 Credit Risk ...................................................................................... 5 1.3 Liquidity Risk ................................................................................... 7 2 ORGANISATION CHART........................................................................... 8 2.1 Risk Management Department....................................................... 9 3 ROLES AND RESPONSIBILITIES .......................................................... 10 3.1 Market Risk ................................................................................... 11 3.1.1 Investment Committee ...................................................... 11 3.1.2 Head of Risk Management ............................................... 12 3.1.3 Risk Management Function (RMF) .................................. 12 3.1.4 Finance Department ......................................................... 14 3.1.5 Research Department ...................................................... 14 3.2 Credit Risk .................................................................................... 14 3.3.1 Investment Committee (IC) .............................................. 14 3.3.2 Risk Management Function (RMF) .................................. 15 3.3.3 Finance Department ......................................................... 15 3.3.4 Research Department ...................................................... 15 3.3 Liquidity Risk ................................................................................. 16 3.3.1 Investment Committee (IC) .............................................. 16 3.3.2 Head of Risk Management ............................................... 16 3.3.3 Risk Management Function .............................................. 17 3.3.4 Finance Department ......................................................... 17 3.3.5 Research Department ...................................................... 17 4 POLICY ..................................................................................................... 18 4.1 Market Risk Policy ........................................................................ 19 4.1.1 Equity Price Risk............................................................... 19 4.1.2 Interest Rate Risk ............................................................. 23 4.2 Credit Risk Policy.......................................................................... 27 4.2.1 Identification of Credit Risk ............................................... 27 4.2.2 Impact of Credit Risk on Other Risks ............................... 28 Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ii Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 4.2.3 Contract Documents ......................................................... 28 4.2.4 Credit Administration ........................................................ 29 4.2.5 Credit Risk Management Tools / Procedures .................. 29 4.2.6 Credit Limits and Monitoring ............................................. 30 4.2.7 Measurement .................................................................... 32 4.3 Liquidity Risk Policy ...................................................................... 38 4.3.1 Liquidity Management Strategy ........................................ 38 4.3.2 Processes to Manage Liquidity Risk ................................ 38 4.3.3 Liquidity Ratios ................................................................. 39 4.3.4 Asset Under Management (AUM) Monitoring .................. 39 4.3.5 Diversification of Liabilities ............................................... 40 4.3.6 Planning Liquidity Needs ................................................. 40 4.3.7 Strategy for Handling Potential Liquidity Crises Contingency Plan) ............................................................ 41 4.3.8 A Company / Fund Specific Crises .................................. 41 4.3.9 Systemic Crises ................................................................ 41 4.4 Independent Review ..................................................................... 42 4.4.1 Responsibilities of independent review ............................ 42 4.5 Compliance ................................................................................... 42 4.6 Portfolio Analysis .......................................................................... 42 5 PROCEDURES ........................................................................................ 43 5.1 Market Risk Procedure ................................................................. 44 5.2 Credit Risk Procedures................................................................. 50 5.3 Liquidity Risk Procedures ............................................................. 54 ANNEXURES ...................................................................................................... 57 Annexure 1 Limit Breach Reports .................................................................... 58 Annexure 2 Brokerage Fee Monitoring Report ................................................ 61 Annexure 3 Equity Price Reports ..................................................................... 62 Annexure 4 Limit Breach Reports for Interest Rate Risk ................................. 63 Annexure 5 Weighted Average Credit Rating .................................................. 64 Annexure 6 Liquidity Ratios ............................................................................. 65 Annexure 7 AUM Monitoring ............................................................................ 66 Annexure 8 Maturity Profile of Investors (For Pension Fund) ......................... 67 Annexure 9 Risk Adjusted performance Measures ......................................... 68 Al Meezan Investment Management Limited Risk Management Policies Procedures Manual Ernst & Y oung Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited OVERVIEW “ Risk has traditionally been related to events causing the possible monetary loss of assets or emergence of a liability. A more contemporary definition however, is far broader and incorporates not only financial risks, but also risks related to operational and strategic objectives. Risk includes the possibility that uncertain future events will cause an entity not to achieve its operational and strategic objectives, as well as the “opportunity - cost” of missed market opportunities”. Risk taking is central to the entity’s activity and the same must evaluate business opportunities in terms of the risk-reward relationship, and will seek to be adequately rewarded for risks it takes. The risks the company / fund take will be reasonable, controlled, and within their financial resources and competence. Risk Management is a discipline at the core of the company / fund and encompasses all the activities that affect its risk profile. It involves identification, measurement, monitoring and controlling risks to ensure that (a) The individuals who take or manage risks clearly understand it. (b) The organization’s risk exposure is within the limits established by Board of Directors (BOD). (c) Risk taking decisions are in line with the business strategy and objectives set by BOD. (d) The expected payoffs compensate for the risks taken (e) Risk taking decisions are explicit and clear. (f) Sufficient capital as a buffer is available to take risk A risk management framework encompasses the scope of risks to be managed, the process / systems and procedures to manage risk and the roles and responsibilities of individuals involved in risk management. The framework should be comprehensive enough to capture all risks the company / fund is exposed to and have flexibility to accommodate any change in business activities. In this document the following major categories of risks have been catered along with adequate risk management policies and frameworks so as to manage their exposure to the company / fund. Market risk, Credit risk and, Liquidity risk Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 1 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited CHAPTER 1 DEFINITIONS Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 2 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 1.1 Market Risk 1.1.1 Equity Price Risk Equity Price Risk “Price risk is the risk that the value of a security or portfolio of securities will decline in the future”. Basically, it's the risk of losing money due to a fall in the market price of a security that company / fund owns. It results from changes in the value of marked-to-market financial instruments. Scrip-wise limit – This defines the maximum percentage of Net Assets that can be invested in any one scrip Total exposure with the company – This defines the maximum percentage of Net Assets that can be invested in debt and equity security of one company. Total exposure with the Group – This defines the maximum percentage of Net Assets that can be invested in companies of a single group. Sector limit – This defines the maximum percentage of Net Assets that can be invested in any one sector. Setting sector- wise limits would limit the fund’s exposure to market vola tility to a particular sector. Tactical allocation limit – This defines the maximum deviation from the strategic allocation that is allowed to the portfolio manager. This minimizes the possibility of large deviations from the benchmark Beta – Beta is a measure of stock’s volatility in relation to the market. Beta = Covariance (i,m) / Variance (m) Covariance (i,m) = covariance between stock return and market return Variance (m) = variance of market return Beta limit of the portfolio – This defines the maximum acceptable beta of the portfolio. A well diversified portfolio will have a beta closer to 1. Beta greater than 1 indicates that the portfolio returns are more volatile than the market, while beta of less than 1 indicate portfolio return that are less volatile than the market. Position Limits – This places a nominal cap on a given position. Position limits are generally used by upper management to help maintain the desired level of firm wide diversification Worst historical change in prices - This identifies how much loss the fund will incur if worst historical decline in prices is realized. Worst historical change in prices taking into account correlation – This identifies how much loss the fund will incur if worst historical decline in prices of the individual securities is realized, taking into account stressed correlations Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 3 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Factor push – This identifies the fund will incur if a factor increases in value Jensen’s Alpha (Ex Post a lpha) – It is portfolio’s excess return over the required return as suggested by the Capital Asset Pricing Model (CAPM). Ex Post Alpha = Actual portfolio return – required return Ex ante alpha – It is the excess of expected return over the required return Ex Ante Alpha = Expected portfolio return – required return Sharpe ratio – This ratio measures the excess return over the risk free rate per unit of risk. Sharpe Ratio = (Portfolio return – Risk free rate) / Standard deviation of portfolio return For risk free rate, PKRV rates can be taken. Further the tenor of PKRV should match with the maturity profile of the portfolio. For equities, 1 year PKRV should be taken, while for fixed income funds, PKRV corresponding to the benchmark maturity should be taken. Information ratio – This ratio measures the excess return over a benchmark rate per unit of active risk i.e. historical volatility of excess returns Information Ratio = (Portfolio return – Benchmark return) / Active Risk Where, Active Risk is the standard deviation of the difference between returns of the portfolio and the returns of the benchmark 1.1.2 Interest Rate Risk Definition Interest Rate Risk “Interest rate risk reflects the degree of vulnerability of an entity to adverse changes in interest rates.” Such risk taking is normal in financial institution and could be an important source of profit making. However, excess interest rate risks might create a serious threat to a fund’s returns and Net Asset Value. Changes in interest rates have an effect on funds’ revenues, influencing the income amount based on the net interest difference as well as the level of other interest associated revenues and transaction costs. A long-term impact of interest rates is on the net worth of an entity as the economic value of the funds’ balance sheet assets posit ions get affected by a variation in the market rates. Therefore, efficient risk management allows retaining interest rate risk within acceptable limits, which is essentially important for safe and normal fund functioning. Ijarah - “Ijarah” means the right to use and enjoy the profits of assets and properties or 'to transfer the right to use and enjoy profits of a particular property to another person in exchange for a rent claimed from him.' Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 4 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 5 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Sukuk - Sukuk is the Arabic name for a financial certificate but can be seen as an Islamic equivalent of a bond. However, fixed-income, interest-bearing bonds are not permissible in Islam. Hence, Sukuk are securities that comply with the Islamic law (Shariah) and its investment principles, which prohibit the charging or paying of interest. Duration - The change in the value of a fixed income security that will result from a 1% change in interest rates. For example, a 5 year duration means the bond will decrease in value by 5% if interest rates rise by 1% and increase in value by 5% if interest rates fall by 1%. Duration = (FV when rates decrease – FV when rates increase) / [2 x initial FV x (change in yield) 2 ] Single party exposure limit – This defines the maximum percentage of net assets that can be invested in / placed with a single company. Total exposure with the company – This defines the maximum percentage of net assets that can be invested in debt and equity securities of a single company. Total exposure with the Group – This defines the maximum percentage of Net Assets that can be invested in companies of a single group. Sector limit – This defines the maximum percentage of Net Assets that can be invested in any one sector. Setting sector- wise limits would limit the fund’s exposure to market volatility to a particular sector. Tactical allocation limit – This defines the maximum deviation from the strategic allocation that is allowed to the portfolio manager. This minimizes the possibility of large deviations from the benchmark Position Limits – This places a nominal cap on a given position. Position limits are generally used by upper management to help maintain the desired level of firm wide diversification 1.2 Credit Risk Definitions Credit risk arises from the potential that the counterparty is either unwilling to perform on an obligation or its ability to perform such obligation is impaired resulting in economic loss to the company / fund. Term Finance Certificate - A corporate debt instrument issued by companies to generate short and medium-term funds with a maturity of greater than one year Sukuk - An Islamic financial certificate, similar to a bond, that complies with Sharia. The issuer of a sukuk sells an investor group the certificate, who then rents it back to the issuer for a predetermined rental fee. The issuer also makes a contractual promise to buy back the bonds at a future date at par value. Exposure to single company limit - This defines the maximum percentage of Net Assets that can be invested with any one borrower / debtor. Exposure to single group limit - This defines the maximum percentage of Net Assets that can be invested with any one group. Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 6 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Exposure to single sector limit - This defines the maximum percentage of Net Assets that can be invested in any one sector. Limit on placements with Banks - This defines the maximum percentage of net assets that can be placed with any one bank Weighted Average Credit Rating – It is the weighted average of all the credit ratings in a portfolio. The measure gives investors an idea of how risky a fund's portfolio is overall. The lower the weighted average credit rating, the riskier the portfolio. The weighted average credit rating is expressed as a regular letter rating (AAA, BBB, CCC). Current ratio – Current ratio is the ratio of an entity’s current assets to its current liabilities. The higher the current ratio, the more capable the entity is of paying its obligations. Current ratio is calculated as follows: Current Ratio = Current Assets Current Liabilities Net Profit margin – It is a ratio of Net Profit to sales. Profit margin is very useful when comparing entities in similar industries. A higher profit margin indicates a more profitable entity that has better control over its costs compared to its competitors. Net profit margin is computed as follows: Net Profit Margin = Net Profit Sales Adjusted Leverage – Adjusted leverage represents the amount of debt used to finance an entity's assets. An entity with significantly more debt than equity is considered to be highly leveraged. Leverage helps both the investor and the entity to invest or operate and magnifies losses if investment moves against the investor. In order to calculate adjusted leverage off balance sheet financing should also be taken into account. If the entity has operating leases, their present value should be added to the debt of the entity. Adjusted Leverage = Long Term debt + PV of Operating Lease Equity Debt Service ratio – It is a ratio that determines how easily the obligor can make interest and principal payment out of his earnings. The ratio should ideally be over 1 which signifies that the entity is generating enough income to pay its debt obligations (Principal and Mark-up). Debt Service Coverage = EBIT Principal + Interest Return On Capital Employed – It is a measure of the returns realized by an entity from its capital. The ratio represents the efficiency with which capital is being utilized to generate revenue. ROCE = EBIT Total Assets – Current Liabilities Al Meezan Investment Management Limited Risk Management Policies Procedures Manual DEFINITIONS Page 7 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 1.3 Liquidity Risk Definition Liquidity Risk “Liquidity Risk is the potential for loss to an entity arising from either its inability to meet its obligations or to fund increases in assets as they fall due without incurring unacceptable cost or losses” Asset Under Monitoring (AUM) – AUM is the market value of assets that an investment company manages on behalf of investors. Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ORGANISATION CHART Page 8 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited CHAPTER 2 ORGANISATION CHART Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ORGANISATION CHART Page 9 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 2.1 Risk Management Department Chief Execut ive Head of Risk Management Risk Management Oficer Risk Management Officer Board of Direct ors Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 10 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited CHAPTER 3 ROLES AND RESPONSIBILITIES Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 11 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 3.1 Market Risk Roles and Responsibilities 3.1.1 Investment Committee General responsibilities Reviewing the economic / market trends; Reviewing impact of industry, legal and regulatory changes on Asset-Liability structure of the company / fund by reviewing the “economic and market report”; Effectively managing th e structure / composition of the fund’s assets and liabilities and review their budgeted growth / contraction, to operate within acceptable parameters through detailed examination of the various reports. Ensuring business activity is consistent with the business objectives Reviewing the operations related to management of core portfolio and also reviewing the portfolio strategy; Reviewing and evaluating broker and commission structure on a quarterly basis; Setting investment limits; Deciding on future business strategy; Reviewing market risk involved in launching of new products and in respect of existing instruments; Deciding on required maturity profile and mix of incremental assets and liabilities; Feedback and input for planning process; Reviewing implementation on previous decisions. Reviewing the performance of Fund Managers. Responsibilities with respect to dealing in equity securities Establishing trading limits for equity instruments; Reviewing the market research papers submitted by the research department, discuss and evaluate sectors and scrips to be covered by equity / economic research; Reviewing compliance with respect to Non-Banking Finance Companies (Establishment & Regulation) Rules, 2003 (NBFC Rules) and Non-Banking Finance Companies and Notified Entities Regulations 2008 (the Regulations) regarding limits and restrictions on investment in particular scrip and sector. Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 12 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Reviewing compliance with respect to internal limits set out by the Investment Committee (IC). Responsibilities with respect to dealing in interest rate driven securities ( debt instrument ) Reviewing the interest rate exposure of the entire portfolio. Ensuring that such exposure remains within parameters; Establishing trading limits for interest rate driven instruments. Approving interest rate setting mechanism for investment portfolio; Deciding upon strategies to implement any change in the company’s / fund’s interest rate risk exposure; 3.1.2 Head of Risk Management The risk management function at the overall company / fund level is to be conducted through ‘Head of Risk Management’ (HRM). HRM will observe the following functions with respect to market risk management: Identify risk exposures accruing to the company / fund by monitoring external factors such as equity prices and performing an assessment of the foreseeable future; Conduct detailed and comprehensive analysis of present and potential market risk factors that might affect the company / fund; Prepare proposals to be approved by IC with respect to risk management strategies with a view to manage the risk exposure to the company / fund to an acceptable level; Manage and review Risk Management Function’s activities. 3.1.3 Risk Management Function (RMF) The RMF will be responsible for: Ensuring that the company’s / fund’s investment portfolio, including government securities, corporate bonds, equities and mutual funds, is marked to market and independently testing prices; Monitoring compliance with limits assigned within the company / fund and reporting for any breaches to the HRM; Ensuring reliability of data used for risk and profit and loss calculation by, wherever necessary, obtaining inputs independently and directly from the relevant sources (Such as reuters’ sheet / KSE bulletin); Ensuring that the market parameters used for risk calculation are consistent based on appropriate assumptions and represent the right market prices; Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 13 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Immediately inform HRM of any crisis/problem in the market. Under such circumstances the company’s / fund’s position will be evaluated and reported; Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 14 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited Performing due diligence on new valuation models; Carrying out review of feasibility studies with respect to new financial instruments; Risk management reports will be prepared with sufficient frequency so as to enable the management to take timely decisions. 3.1.4 Finance Department The finance department will be responsible for: Providing data to the RMF for the calculation of limits in place to monitor market risk. Providing details of the brokerage fee paid to the RMF. Providing portfolio positions of the funds to the RMF 3.1.5 Research Department Research department shall be responsible for: Providing the data of the market value of equity and debt securities to the RMF. Providing required data to the RMF for the calculation of risk adjusted performance of the funds. 3.2 Credit Risk Roles and Responsibilities 3.3.1 Investment Committee (IC) The IC is responsible for reviewing credit risk management strategies and policy, fixed-income investment portfolio and funds management. Any changes, required in the credit risk management policy due to changes in micro and macro economic conditions, will be recommended by the IC and approved by the BOD. The IC will review all policy and procedure requirements for the credit quality of permissible investments and will make recommendations to the BOD whenever minimum credit quality requirements for investments need to be revised. The IC will evaluate the overall quality and risk of the current and potential investment instruments; The IC will review policy and procedure for pre-acquisition evaluations and on-going evaluations of credit exposures will make recommendations to the BOD, whenever there is any need of revision. The IC will review information obtained by the Research and Risk Management Function regarding BOD approved brokers and financial institutions and shall make recommendations to the BOD for any changes necessary in such information. The IC will have the authority for approving relationships with brokers and financial institutions and setting minimum acceptable limits for investment. Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 15 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 3.3.2 Risk Management Function (RMF) The purpose of RMF is to maintain credit discipline and to enunciate risk management and control process. The RMF will be responsible for: Following rational approach in the management of risks inherent in the entity portfolio and ensure that the risks remain within the boundaries / limits established by the IC; Establishing systems and procedures relating to risk identification and monitoring of investment portfolio quality, and early warnings; Laying down the minimum criteria for establishing investment limits with the financial institutions based on external credit rating. Laying down the minimum criteria for establishing broker limits based on internal evaluations. Laying down the minimum criteria for making investments in Sukuk / Term Finance Certificates (SUKUKs). Reviewing on a monthly basis, the credit worthiness of the financial institutions and investments by considering the external rating and doing the same for brokerage houses based on internal evaluation. Immediately seize the outstanding limit of all financial institutions whose rating are put on “watch list” or downgraded by credit rating agencies. Communicate all such cases to IC for review. 3.3.3 Finance Department The finance department will be responsible for: Providing data to the RMF for the calculation of limits in place to monitor credit risk. Providing data to monitor the weighted average credit rating of the portfolio. Providing portfolio positions of the funds to the RMF 3.3.4 Research Department Research department shall be responsible for: Providing the data to the RMF to conduct counterparty and Sukuk evaluation. Al Meezan Investment Management Limited Risk Management Policies Procedures Manual ROLES AND RESPONSIBILITIES Page 16 of 6 2 Ernst & Young Ford Rhodes Sidat Hyder A Member Firm of Ernst & Young Global Limited 3.3 Liquidity Risk Roles and Responsibilities 3.3.1 Investment Committee (IC) Investment Committee (IC) primarily focuses on strategic positioning of the balance sheet of the company / fund. It involves ensuring the linkage between the asset and liability side. It is largely about strategic balance sheet management of the company / fund involving liquidity risks and other risks inherent in it. IC has the primary responsibility for the formulation of overall strategy and oversight of the ALM function. IC will be responsible for: With respect to Open-end fund Ensuring the maintenance of an adequate funding base for the entity. Ensuring that crisis liquidity planning is in place and appropriately enacted if required. Discussing introduction of any new products and their impact on liquidity risk and other risks inherent in the balance sheet of the fund. Reviewing and managing concentration of risk arising from investments and funding requirements. Approving the assumptions to be applied to generate gap reports / ratios for liquidity risk management. Investing the funds available to the fund in various investment opportunities. With Respect to Pension Fund The investment committee shall ensure that adequate funds are in place to meet liquidity requirements and to assess when the fund will face excess redemption requirements. With respect to Closed-end fund The strategic committee shall ensure that adequate funds are in place to meet liquidity requirements of routine purchases, dividend announcement, payment of investment advisor and other charges etc. 3.3.2 Head of Risk Management The Head of Risk Management will be responsible for: Ensuring that the risk takers are complying with risk management parameters as approved by the board and requirements of SECP and Non-Banking Finance Companies (Establishment & Regulation) Rules, 2003 (NBFC Rules) and Non-Banking Finance Companies and Notified Entities Regulations 2008 (the Regulations);