The Corporate Affairs Ministry (MCA) plans to revamp its company law rules, and seek public input in alignment with the Finance Minister’s Budget announcement this year.
The initiative aims to improve regulation in the areas overseen by MCA and simplify compliance. The MCA intends to complete these stakeholder consultations by this fiscal year-end, utilising both online feedback and in-person stakeholder events in various cities. Additionally, other financial sector regulators, such as PFRDA, IBBI, and IRDAI, have already started similar public consultation exercises.
“When the rules under company law were first made, there was public consultation. But after that over the years we just went about making changes to the rules from time to time without any public consultations. Now that will change for a comprehensive review. This proposed initiative will be an opportunity for stakeholders to give their opinion on the rules”, official sources said.
“We are building in a framework. It should soon be ready.” India had enacted a new comprehensive company law in 2013, and it had replaced the earlier one that was enacted in 1956. MCA, which is the regulator for companies, especially the unlisted ones, is hoping to complete the public consultations for rules revamp before the end of this fiscal, sources added.
The proposed MCA move to go in for public consultations is in line with the Finance and Corporate Affairs Minister Nirmala Sitharaman’s budget speech this year wherein she announced that public consultation, as necessary and feasible, will be brought to the process of regulation making and issuing subsidiary directions.
She had said this would be done to meet the needs of Amrit Kaal and to facilitate optimum regulation in the financial sector.
Sitharaman had also said that financial sector regulators will be requested to carry out a comprehensive review of existing regulations so as to simplify, ease and reduce cost of compliance.
“For this, they will consider suggestions from public and regulated entities. Time limits to decide the applications under various regulations will also be laid down,” Sitharaman had said in her Budget speech.
MCA is now not only looking to get public comments through online medium, but also plans to go in for public consultations at the level of additional directors in various cities of the country. “We will go beyond obtaining online feedback and hold stakeholder consultation events for comprehensive review”, sources added.
Meanwhile, asked about the likely rules that would be issued by MCA for implementation of Competition (amendment) Act, sources said that most rule-making authority lies with the Competition Commission of India (CCI), while the MCA’s role primarily involves guiding the CCI in conducting public consultations.