CA body to study fiduciaries rules

New Delhi, July 20: Chartered accountants’ apex body ICAI has set up an expert group to study the proposals made by market watchdog Sebi for regulating fiduciaries in the securities market.

Sebi has been looking to strengthen its oversight mechanism and has proposed a strict set of norms for fiduciaries in the securities market as part of larger efforts to curb financial misdoings.

The Institute of Chartered Accountants of India (ICAI), which has more than 2.80 lakh members, has constituted a group to study the proposals.

The group would “study/examine the consultative paper on proposed Sebi (Fiduciaries in the Securities Market) (Amendment) Regulations and formulate its comments on the areas affecting the profession,” the institute said.

Many members of the institute conduct audit works for various firms.

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.

Entities such as merchant bankers, rating agencies, custodians, debenture trustees and registrar to public issues are registered with Sebi.

— PTI