SEBI to modify secretarial compliance report format, auditors’ appointment norms to strengthen corporate governance

FPJ News Service mumbai

In a move to strengthen corporate governance at listed firms, the Securities and Exchange Board of India (SEBI) has proposed a revised format for annual secretarial compliance report, eligibility criteria for the appointment of auditors and inclusion of monetary thresholds for Related Party Transactions (RPTs) approvals. These proposals are aimed at ensuring that listed entities maintain high standards of compliance and transparency in their dealings.

In its consultation paper, SEBI has proposed changes to improve the format and content of the Annual Secretarial Compliance Report (ASCR), aiming for more explicit confirmation of compliance with securities law. The suggestions have been made for exemptions related to corporate governance certifications and secretarial auditor reports when ASCR is attached to the annual report.

The proposals include better enforcement mechanisms and making the ASCR a mandatory part of the annual report. On specifying eligibility criteria for the appointment of statutory auditors, the regulator has proposed incorporating provisions in the LODR Regulations similar to those in the Companies (Audit and Auditors) Rules 2014, which ensure that auditors' qualifications and experience match the listed entity's size and complexity. It has proposed that the audit committee consider the qualifications and experience of the signing partner(s) to ensure alignment with the listed entity's needs.