MCA starts major review of regulatory rules
March 6, 2024
The ministry of corporate affairs (MCA) has begun a comprehensive review of the rules and regulations, including the norms for accounting and auditing practices.
According to Manoj Govil, secretary-MCA, extensive public consultations would be carried out for the review, which is aimed at making compliance easier, and making regulation more system-driven and effective.
The review is expected to cover the entire gamut of laws that come under the MCA such as Companies act, LLP Act, and the Insolvency & Bankruptcy Code. Also, it would encompass all regulatory bodies concerned such as the National Financial Reporting Authority, The Institute of Chartered Accountants of India, Competition Commission of India, Institute of Company Secretaries of India, and Institute of Cost Accountants of India.
Govil said at the first-ever international conference organised by the NFRA here that that the review is in line with finance minister Nirmala Sitharaman’s announcement in the FY24 Budget speech asking for the financial sector regulators to simplify and reduce the cost of compliance.
The ministry has reportedly formed groups to engage with the stakeholders, and the review is expected to be completed by FY25 end.
“In the recent past, the companies act has been de-criminalised to a large extent. The existing rules should be modified with an aim to promote the ease of doing business. Also, the ministry must look at minimising the interference of financial regulators in the business decisions of the companies. The corporate sector would welcome any changes in the rules if they lead to better transparency and information disclosures,” said Ravi Singhania, managing partner, Singhania & Partners LLP.
The review of rules are coming at a time when a record number of new companies and LLPs are being formed. As per MCA’s latest figures, some 0.17 million companies have been incorporated in the 11 months of FY24, which is higher than the total incorporation for the full financial years in the past.
[The Financial Express]
