Companies

SEBI has rights to regulate auditors for activities under its regulations: Corp Affairs Secy

PTI New Delhi | Updated on September 16, 2018 Published on September 16, 2018

Markets watchdog SEBI is “well within its rights” to regulate auditors with respect to activities under its regulations, a senior government official said amid chartered accountants’ apex body ICAI raising concerns about the proposal.

Corporate Affairs Secretary Injeti Srinivas also said that there will be no “cross cutting regulations“.

His comments come against the backdrop of SEBI proposing stricter norms for fiduciaries, including chartered accountants, cost accountants, company secretaries and valuers, in the securities market.

The proposed changes to the SEBI (Fiduciaries in the Securities Market) Regulations are likely to be discussed at the regulator’s board meeting on September 18.

“SEBI is well within its rights to have a regulatory control over auditors with respect of certifications which are required by SEBI under their Act and their regulations,” Srinivas told PTI.

Asserting that there is a “clear demarcating line”, he said that in every legislative framework, the corresponding regulators would regulate. “There will be no cross cutting regulations,” he noted.

The Corporate Affairs Secretary is also part of the SEBI board.

The Institute of Chartered Accountants of India (ICAI), which comes under the Corporate Affairs Ministry, has raised strong objections to SEBI’s proposal to consider auditors as fiduciaries.

In its submissions on the consultative paper on proposed amendments to the norms for fiduciaries, the ICAI had said that there is no specific statutory provision under the SEBI Act to act against auditors of listed companies, according to a source.

Another submission from the ICAI was that taking action against an individual for the same offence thrice under the ICAI Act, Companies Act and SEBI Act, is against the constitutional provisions.

However, SEBI has maintained that it is empowered to exercise jurisdiction over persons associated with the securities market, the source said.

The amended norms for fiduciaries would be applicable for entities that undertake third-party fiduciary duties, assignments and engagements under the securities law.

Once in place, the regulator would have more powers to take action against fiduciaries in case they have submitted false certificates, reports or violated regulations.

Published on September 16, 2018

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill.

In these difficult times, we, at BusinessLine, are trying our best to ensure the newspaper reaches your hands every day. You can also access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all our readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. You can help us by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section.

Our subscriptions start as low as Rs 199/- per month. A yearly package costs just Rs. 999 – a mere Rs 2.75 per day, less than a third the price of a cup of roadside chai..

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor