The Hindu Business Line : ICSI seeks larger role in capital market regulatory regime

IN its endeavour to crave out new areas of practice for company secretaries, the Institute of Company Secretaries of India (ICSI) has sought a larger role for their professionals in the regulatory regime of capital market. The Institute representatives had recently met the Securities and Exchange Board of India (SEBI), Chairman, Mr G.N. Bajpai, and apprised him of how ICSI can work as an extended arm of the market regulator.

Some of the areas where a company secretary can play a vital role includes: securities audit, and annual audit and compliance report, Mr Mahesh Anant Athavale, President, ICSI said. Besides this, the institute has asked for making compliance audit of the entire listing agreement mandatory, the need to make compliance of secretarial standards compulsory for all listed companies, and compliance audit of intermediaries.

The ICSI has also sought a role for company secretaries for conducting due diligence and certification that all norms laid down by SEBI have been complied with. The present system of due diligence by merchant bankers needs a re-look, the professionals said. The institute has suggested that the due diligence and certification that all norms laid down by SEBI under the SEBI (DIP) Guidelines, 2000 have been complied with should be issued by a panel constituted by the capital market regulator, which should include independent professionals such as practising company secretaries.

Elaborating further, sources told Business Line, "The carrying out of the due diligence by an independent agency would definitely provide a level playing field to the professionals."

The institute has also suggested that the qualification of company secretaries be also recognised for the purposes of the audit of members of the stock exchanges and also for giving certification on the compliance report. Further, in view of several defaults in compliance of listing agreement by corporates and overload at stock exchanges to check defaulting companies, compliance audit of the entire listing agreement should be made mandatory, Institute sources said.

To ensure that the companies adopt uniform practices in the management of their affairs, the Institute has urged SEBI to make compliance of secretarial standards compulsory for all listed companies.

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