The Securities and Exchange Board of India (SEBI) has proposed several changes to the format of the Annual Secretarial Compliance Report (ASCR) to enhance corporate governance and ensure compliance with securities laws. These proposals include modifications related to corporate governance certification, exemptions for secretarial audit reports, and monetary thresholds for Related Party Transactions (RPTs).
Key Proposals by SEBI
Enhancing Corporate Governance Standards
SEBI aims to improve corporate governance among registered firms by introducing eligibility criteria for auditors and monetary limits for RPT approvals. The proposed changes focus on ensuring transparency and fair competition among market participants.
Mandatory Inclusion of ASCR in Annual Reports
The proposal mandates the inclusion of the Annual Secretarial Compliance Report (ASCR) as part of a company’s annual report to enhance disclosure standards.
Public Feedback Invitation
SEBI has invited public comments on the proposed changes until February 28, 2025.
Proposed Changes at a Glance
| Proposal | Details |
|---|---|
| Corporate Governance Certification | Revised eligibility criteria for auditors to strengthen compliance |
| Secretarial Audit Exemptions | Suggested relaxations for specific categories of firms |
| Inclusion of ASCR in Annual Reports | ASCR to be a mandatory part of listed firms’ annual disclosures |
| RPT Approval Thresholds | Monetary limit set at 10% of the subsidiary’s net worth |
| Clarification on RPT Definition | Ensuring transactions with subsidiaries comply with listing regulations |
Revised RPT Monetary Thresholds
SEBI proposes a standard threshold for Related Party Transactions (RPTs):
- For subsidiaries without a financial track record: The threshold will be 10% of the subsidiary’s net worth, certified by a Chartered Accountant.
- For subsidiaries with negative net worth: Consideration will be given to share capital and securities premium instead of net worth.
This move aims to create uniformity in compliance standards across all subsidiaries.
SEBI’s Crackdown on Financial Influencers
In a separate development, SEBI has taken action against six financial advisory entities accused of offering investment advice without proper registration. One of the major names on this list is Asmita Patel Global School, run by financial influencer Asmita Patel.
Entities Banned by SEBI
| Entity Name | Involvement |
| Asmita Patel Global School | Allegedly provided unregistered financial advisory services |
| Asmita Jindal Patel | Direct involvement in unauthorized advisory services |
| Jitesh Jethalal Patel | Accused of participating in illicit financial advisory activities |
| King Traders | Alleged to have collected funds without SEBI authorization |
| Jamini Enterprises | Suspected of engaging in unregistered financial promotions |
| United Enterprises | Found to have violated SEBI investment advisory regulations |
These entities reportedly raised over ₹53 crore by providing unauthorized investment recommendations to the public.
Conclusion
SEBI’s recent proposals and regulatory actions highlight its commitment to strengthening compliance frameworks and protecting investors. The proposed changes to the Annual Secretarial Compliance Report will reinforce corporate governance, while the crackdown on unauthorized financial advisors ensures market integrity. SEBI continues to play a crucial role in fostering a transparent and well-regulated securities market in India.
