Introduction: The Institute of Company Secretaries of India (ICSI) has recently issued an advisory that provides important guidelines for Company Secretaries in Practice. This advisory focuses on ensuring compliance with various regulations and circulars issued by the Securities Exchange Board of India (SEBI) and the Stock Exchanges. With the growing complexity of the financial landscape, the need for robust governance and compliance mechanisms has never been greater. This article provides an in-depth analysis of the advisory, helping professionals understand its implications and how best to implement it.
Context of the Advisory: Regulators like SEBI and Stock Exchanges have recognized the significant role of Company Secretaries in Practice. They are now authorized to issue Certificates, Reports, and conduct audits under several regulations and circulars like SEBI’s Depositories and Participants Regulations, Listing Obligations and Disclosure Requirements, and many more.
Key Points of the Advisory
i. Ensuring Minute Regulatory Compliance: The advisory urges Company Secretaries to meticulously check the regulatory compliance status of their clients. An exhaustive and updated checklist should be maintained to ensure thorough scrutiny.
ii. Reporting Non-Compliances: The Company Secretaries are not just expected to assist in compliance but are also required to report any non-compliance issues. This includes penalties imposed and show-cause notices served either by SEBI, MCA, RBI, Stock Exchanges, or any other regulators.
iii. Upholding Governance Standards: The overarching aim of the advisory is to uphold a culture of governance and compliance. The Company Secretaries are encouraged to reflect the true picture of governance standards while conducting reviews.
Implications for Professionals: This advisory signifies an increased level of responsibility for Company Secretaries. They will need to be more diligent in scrutinizing compliance aspects and ensure that they maintain updated checklists for the same. Any non-compliance issues must be reported transparently to uphold governance standards, thereby protecting the interests of investors and stakeholders alike.
Conclusion: The latest advisory from ICSI is a step towards fortifying the role of Company Secretaries in Practice. It brings in higher standards of accountability and vigilance, aimed at protecting the interests of investors and stakeholders. With the growing focus on governance and compliance, adhering to these guidelines will not only fulfill regulatory mandates but also contribute to the overall integrity of the financial markets.
The advisory pushes Company Secretaries to be more proactive, meticulous, and transparent in their practice, and this can be seen as a move to strengthen the governance fabric of the Indian financial ecosystem.
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Institute of Company Secretaries of India
6th September, 2023
ADVISORY FOR ENSURING COMPLIANCE WITH VARIOUS REGULATIONS/ CIRCULARS ISSUED BY SECURITIES EXCHANGE BOARD OF INDIA (SEBI) AND THE STOCK EXCHANGES
Dear Professional Colleague,
The Regulators i.e. Securities Exchange Board of India and the Stock Exchanges have reposed confidence in the profession of Company Secretaries and have recognised Company Secretaries in Practice for issuance of Certificates, Reports and conduct audit under various Regulations and Circulars issued by them from time to time. The details of few are as under for reference: –
- SEBI (Depositories and Participants) Regulations, 2018,
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
- SEBI (Investment Advisers) Regulations, 2013,
- SEBI (Delisting of Equity Shares) Regulations, 2021,
- SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021,
- SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018,
- SEBI (Buy-Back of Securities) Regulations, 2018,
- SEBI (Infrastructure Investment Trusts) Regulations, 2014,
- SEBI (Real Estate Investment Trusts) Regulations, 2014,
- BSE/NSE Circulars w.r.t. compliance with Structured Digital Database under SEBI (Prohibition of Insider Trading) Regulations, 2015 and many alike.
With an intent to further strengthen the effectiveness of the certification! audit! report issued by the Company Secretaries in Practice and to protect the interest of investors and stakeholders as a whole, Company Secretaries in Practice are advised to thoroughly check minutest regulatory compliance on the part of the client, maintain updated checklists to cross verify the compliances and be inquisitive w.r.t. compliances.
All Company Secretaries in Practice are further expected to also report the non-compliances of the applicable provisions, penalties imposed and show cause notices served, during the period under review, to the company or its directors & KMP either by the SEBI, MCA, RBI, Stock Exchanges or any other Regulator, to reflect the true picture of the governance standards.
This advisory is being issued in order to encourage fellow Company Secretaries to uphold governance culture and ensure compliances as a whole.
CS Manish Gupta
President, ICSI
