INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The board of Securities and Exchange Board of India is likely to discuss next week a stricter framework for fiduciaries in the
securities market, including auditors and valuers, according to a senior official
In July, the regulator issued a consultative paper on the proposed Sebi (Fiduciaries in the Securities Market) (Amendment) Regulations for
applicable for entities that undertake third-party fiduciary duties, assignments and engagements under the securities law.
While the
it is empowered to exercise jurisdiction over persons associated with the securities market, the official said.
Once the amendments are in
place, Sebi would have more powers to take action against fiduciaries in case they have submitted false certificates, reports or violated
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
Under the norms for fiduciaries proposed by Sebi, defaulters would face stringent penal actions, including ban from securities markets and
disgorgement of fees.
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.
A high-level panel on corporate governance, headed by eminent banker
Uday Kotak, had suggested that the 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, Sebi had said that 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
