SEBI’S NEW DIRECTIVE ON SECRETARIAL AUDIT
R.V. SEKAR
![R.V. SEKAR]()
R.V. SEKAR
COMPLIANCE EXPERT , LODR SPECIALIST ,CONTRIBUTOR IN FEMA , INSOLVENCY LAWS AND CORPORATE LAWS
In case of Listed Companies, the Secretarial auditor will be appointed for 5 years by the shareholders. In case of firm- it will be 10 years;
Removal of Secretarial auditor can also be done by the shareholders only;
Past tenure of the Secretarial auditor not to be taken into account for the 5 year/ 10 year term ie :
This Provision comes with prospective and immediate effect.
SEBI LODR 3rd Amendment, 2024
Key Highlights
SEBI has mandated key changes in secretarial auditor appointments for listed entities, focusing on governance and transparency.
Key Points
1. Appointment in AGM:Secretarial auditors must now be appointed by shareholders during the Annual General Meeting (AGM) for a tenure of five years.
2. Expanded Role:Secretarial auditors are responsible for reviewing compliance with SEBI regulations, corporate laws, and governance standards.
3. Transparency:Reports must highlight non-compliance, ESG (Environmental, Social, Governance) adherence, and governance improvements.
4. Disclosure Timelines:Listed companies must disclose key auditor details and material events within specified timeframes to stock exchanges.
5. Firm Appointments:Companies can also appoint firms of practicing company secretaries (PCS) as secretarial auditors.
6. Materiality Criteria:Enhanced disclosure norms apply to governance decisions impacting shareholder interests.Implications for Company SecretariesIncreased recognition as governance leaders.Strategic advisory role to boards on compliance and governance frameworks.Opportunities for growth in ESG and governance-related audits.
Practicing Company Secretary I Corporate Law, SEBI, FEMA and CSR Advisory Services I Corporate Governance and Compliances | IICA Registered Independent Director | Fellow Member of ICSI and ICAI | Rotarian
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