MCA clarifies fiduciary powers

The government has said that fiduciary powers of an entity will not be taken into account while determining the holding company-subsidiary relationship. The move by the Ministry of Corporate Affairs (MCA) comes in the wake of representations from various quarters seeking clarity on exercise of powers in the ‘fiduciary capacity’ with regard to defining a subsidiary company. Fiduciary powers refer to authority vested with an entity to take financial decisions on behalf of someone else.