The Ministry of Corporate Affairs (MCA) has been taking various initiatives on a continuous basis to provide less stringent regulations, including measures with respect to filing requirements for small companies, One Person Companies (OPCs) and start-ups.
This was stated by Shri Anurag Thakur, Union Minister of State for Finance & Corporate Affairs, in a written reply to a question in Lok Sabha.
The changes in this regard are made in the Companies Act, 2013 as well as various Rules and Forms thereunder from time to time. The Companies (Auditor’s Report) Order, 2016 (CARO, 2016) has not been extended to private schools and hospitals built on concession land.
As per the National Financial Reporting Authority (Manner of Appointment and other Terms and Conditions of Service of Chairperson and Members) Rules, 2018, NFRA board has 13 members out of which 3 members represent ICAI as per clause (v), (vi) and (vii) of Rule 4(6). The main functions under section 132(2) and (4) will be performed by the executive body of NFRA and as such, no conflict of interest will be there.
The Securities and Exchange Board of India (SEBI) under the Department of Economic Affairs (Ministry of Finance) has stated on 20.11.2019 that the following recent measures have been taken by SEBI to improve governance standard in rating agencies:-
- Credit Rating Agencies (CRA) to segregate the activity other than the rating of financial instruments under the respective guidelines of a financial sector regulator or any authority as may be specified by SEBI.
- MD/CEO of a CRA shall not be a member of rating committees of the CRA.
- Rating committees of a CRA shall report to a Chief Ratings Officer (CRO).
- One third of the board of a CRA shall comprise of independent directors, if the board is chaired by a non-executive director. In case the board of the CRA is chaired by an executive director, half of the board shall comprise of independent directors.
- The board of a CRA shall constitute the following committees:
- Ratings Sub-Committee
- Nomination and Remuneration Committee
- The Chief Ratings Officer (CRO) shall directly report to the Ratings Sub-Committee of the board of the CRA.
- The Nomination and Remuneration Committee shall be chaired by an independent director.
- CRAs shall meet the audit committee of the rated entity, at least once in a year, to discuss issues including related party transactions, internal financial control and other material disclosures made by the management, which have a bearing on rating of the listed Non-Convertible Debentures (NCDs).
- Minimum net worth requirement of CRA increased from existing Rs. 5 Crore to Rs. 25 Crore.
- The promoter of a CRA to maintains a minimum shareholding of 26% in the CRA for a minimum period of 3 years from the date of grant of registration by the Board.
- A CRA shall not, directly or indirectly, have 10% or more shareholding and/ or voting rights in another CRA and a CRA shall not have representation on the Board of any other CRA.
Ministry of Corporate Affairs