New Delhi, Feb. 18: Vinod Dhall, secretary in the department of company affairs (DCA), is going to soon meet the chairman of the Securities and Exchange Board of India (Sebi) to sort out the conflicting regulatory areas between the two regulatory bodies.
Speaking on the sidelines of a discussion on the Naresh Chandra committee report on auditing and corporate governance, Dhall said he will meet Sebi chairman G. N. Bajpai to see how the two regulators can co-ordinate in areas where there are overlaps.
The joint parliamentary committee (JPC) report had directed both the regulatory bodies to sort out the areas of overlapping jurisdiction, if any, and be clearly responsible for the issues that fall within the bailiwick of each regulator, instead of passing the buck.
Talking in the context of delimiting regulation and curbing over-regulation, Naresh Chandra, author of the report on corporate governance and regulatory issues who was present at the discussions held by the Confederation of Indian Industry (CII), said, “For the double whammy of the Companies Act and the clause 49 of the listing requirement of Sebi, we had suggested the harmonisation of the two in the committee report.”
The Naresh Chandra committee report says it would be appropriate for Sebi to use its powers of subordinate legislation, in consultation with the DCA, and vice versa. All committees, set up either by Sebi or DCA to consider changes in law, rules or regulations should have representatives of both Sebi and DCA.
The committee has recommended that Sebi should refrain from exercising powers of subordinate legislation in areas where specific legislation exists in the Companies Act. It states that a formal structure needs to be set up to ensure that DCA which regulates all companies and Sebi which regulates only listed companies, to act in co-ordination and harmony.
The report states that if any additional requirements are sought to be prescribed for listed companies, then in areas where specific provisions exists in the Companies Act, it would be appropriate for Sebi to have the requirement prescribed in the Companies Act through a suitable amendment.