Sebi provides rules to bring the certification authorities, secys society under guardianship

The Proposed Change Will Assure Sebi

The Securities and Exchange Board of India (Sebi) has proposed amendments to tighten laws governing chartered accountants, corporate secretaries, appraisers and other mandated third parties by listed companies to verify financial results, among others. other stuff. The proposed amendment will allow the Sebi to take action against errant trustees.

"There are certain trustees such as chartered accountants, business secretaries, accountants, appraisers and supervisory agencies that are neither registered nor regulated by the Sebi." said in a regulatory advisory document for trustees in the securities market. "According to the different SEBI regulations, they are engaged by issuers, intermediaries, pool investment vehicles, investor in the securities market, etc. to issue certificates or reports as required by the respective regulations", said Sebi. move follows several cases of problems of auditing and misappropriation of bank funds by listed companies. The controller has no direct control over audit failures.

These trustees play an important role with regard to intermediaries (listed companies), Sebi said. "These trustees periodically audit the books and issue certificates of compliance to determine whether the intermediary has maintained the required net worth, whether risk management systems are in place, whether the intermediary A strong mechanism to redress investor grievances or maintain According to the Sebi newspaper, the proposed regulation proposes to amend various regulations to provide that where a trustee undertakes an undertaking or badignment under the securities laws securities or investors in securities and issues certificate and report, such a trustee should ensure that it is true in all material aspects. "The board of directors, if it is satisfied that the trustee has presented a false certificate or a false report or has contravened any of the provisions of this by-law, may take the appropriate measures under the applicable securities laws "

Some of the trustees such as the bankers, credit rating agencies, custodians, debenture trustees and issuing registrars are registered and regulated by the Sebi under specific regulations notified. for this purpose, Sebi said. The capital issue regulation follows primarily a disclosure-based regime and investors rely on the offering documents and financial statements that are audited or reviewed or validated by various trustees such as: as chartered accountant, corporate secretary, appraiser and various intermediaries The corporate governance committee headed by Uday Kotak, while considering strengthening the monitoring, supervision and enforcement of the law by the Sebi, recommended that the Sebi powers to act against auditors and other third-party trustees with legal obligations under securities laws, subject to appropriate safeguards. This power should be extended to take action against the offending individuals, as well as against the company in question with respect to their listed entity functions. This power should be provided in case of gross negligence, and not only in case of fraud / connivance, he had proposed.

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