ICAI group to study Sebi proposals on fiduciaries
Chartered accountants' apex body ICAI has set up an expert group to study the proposals made by regulator Sebi for regulating fiduciaries in the securities market.
The Institute of Chartered Accountants of India (ICAI), which has more than 2.80 lakh members, has constituted a group to study the proposals.
The group would "study/ examine the consultative paper on proposed Sebi (Fiduciaries in the Securities Market) (Amendment) Regulations and formulate its comments on the areas affecting the profession," the institute said in a circular.
Many members of the institute conduct audit works for various companies.
Those found guilty of providing wrong audit or valuation reports would have to cough up any unlawful gains they might have made in the process, as per the proposals.
It also comes against the backdrop of the role of auditors and valuers coming under the regulatory scanner in a number of cases, involving financial misdoings.
Entities such as merchant bankers, rating agencies, custodians, debenture trustees and registrar to public issues are registered with Sebi. However, some other fiduciaries like practising chartered accountants and company secretaries, cost accountants, valuers and monitoring agencies are not registered with it.
To fill this gap, a high-level panel on corporate governance, headed by eminent banker Uday Kotak, had also suggested that Sebi should have clear powers to act against auditors and other third-party fiduciaries with statutory duties in case of frauds as well as gross negligence.
Issuing the consultation paper earlier this month, Sebi said it is already empowered to issue directions to any person associated with the securities market (including fiduciaries), in the interest of investors or for its orderly development.
Since these fiduciaries are not specifically registered with the regulator or regulated by it under any regulation, there may be a need to clarify and specify the actions that may be taken by Sebi against such fiduciaries in case they submit false reports or certificates.
According to the proposed amendments to the regulations, a fiduciary who submits or issues any certificate or report should ensure that it is true in all material respects, while exercising due care, skill and diligence and ensuring proper care with respect to all processes involved in its issuance.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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