Regulatory Compliance Management
In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that corporations or public agencies aspire to in their efforts to ensure that personnel are aware of and take steps to comply with relevant laws and regulations.
Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and harmonized sets of compliance controls. This approach is used to ensure that all necessary compliance requirements can be met without the unnecessary fines and penalties.
Corporate scandals and breakdowns such as the Satyam case of reputational risk have highlighted the need for stronger compliance and regulations for publicly listed companies. The most significant regulation in this context is Regulation 27 (2) of the SEBI (LODR), 2015 which defined significant tighter personal responsibility of corporate top management for the accuracy of reported Corporate Governance and inter alia stipulates preparation of a Compliance Report of all laws applicable to a Company and review of the same by the Board of Directors periodically as well as to take steps by the company to rectify instances of non-compliance and to send report on compliance to Stock Exchanges quarterly. By the said circular the Stock Exchanges have been directed by the SEBI to set up a separate monitoring cell with identified personnel to monitor the compliance with the provisions of the revised Regulation 27 (2) of the SEBI (LODR), 2015 on corporate governance and to submit a consolidated compliance report to SEBI within 15 days from the end of each quarter.
As per the new SEBI (Listing Obligation and disclosure requirements) Regulations 2015, (LODR) read with Section 134 (5) (f) of the Companies Act, 2013 the relevant provisions mandates and contemplates the present corporate bodies to incorporate and implement a legal Compliance management system:
- Reg. 4(1) of SEBI (LODR), 2015 prescribes-
The listed entity shall abide by all the provisions of the applicable laws and other guidelines.
- Reg. 4(2) (f) of SEBI (LODR), 2015 directs-
The board of directors of the listed entity shall ensure that a System for compliance with the law and relevant standards are in place.
- Reg. 17(3)of SEBI (LODR), 2015 provides-
The board of directors shall periodically review Compliance reports pertaining to all laws applicable to the listed entity, prepared by the listed entity as well as steps taken by the listed entity to rectify instances of non-compliances.
Compliance in India and other countries generally means compliance with laws and regulations. These laws can have criminal or civil penalties or can be regulations. There are a number of other Acts & regulations besides SEBI guideline such as Information Technology Act 2000, Companies Act 2013, etc. which mandates the Corporates both in Public and Private sectors to maintain and conduct periodic review of the regulatory functions and process of the organizations to ensure that the company’s goal, structure and ongoing operations are consistent with the latest developments in business and corporate laws and regulations which lowers the compliance risk profile, reduce fines, reassign headcounts, enable a better and higher use of the limited law department’s resources, save measurable cost and improve effectiveness and ensure due diligence.
Accordingly, the listed Companies will have to have a system for reporting compliances with laws applicable to them to the Board periodically. Hence, a legal compliance reporting process is necessary to comply with Reg. 27 (2) of the SEBI (LODR), 2015.
Putting together all the Acts and Regulations which are applicable to any organisation and the list of compliances under those Acts is a very complex and tedious process, and is better entrusted to the experts who have sufficiently researched and documented all the applicable laws and formulated guidelines on this matter to ensure due diligence on the part of the organisation. Independent assessment of legal compliance by experts will benefit the organisation to establish its credibility before its clients.
M. K. GHOSH & CO. is an industry-leading provider of legal research and compliance management services. It undertakes compliance monitoring exercise on the basis of constant legal research and provides a solution for ever-growing compliance challenge for the top Corporates of the country including “Maharatna”, “Nabaratna” and “Miniratna” Public Sector Undertakings (PSUs).
The firm constantly monitors changes in industry rules and regulations, assesses and identifies potential exposures and risk of the client under the same and makes sure they are being addressed effectively with the volume of changes and breadth of exposures and ensure there are no violations.
It also provides legal compliance audit service to check and ensure that the Company’s goal, structure and on-going operations are consistent with the latest development in business and corporate laws and regulations which lowers the compliance risk profile, reduces fines, reassigns headcounts, enables a better and higher use of limited law department’s resources, saves measurable costs and ensure due diligence.
The firm provides its clients the solution before there is a problem by measuring and managing their risk across multiple legal and regulatory mandates and jurisdictions.
The firm’s strength lies in its commitment to provide superior research-based services using world-class technology at the most affordable rate.
Regulatory Compliance Management includes the following :
- PRE COMPLIANCE REQUIREMENTS :
- STRATAGIC ANALYSIS OF THE COMPANY.
- LEGAL RESEARCH FOR IDENTIFICATION OF :
- ALL APPLICABLE LAWS ENACTED BY CENTRAL & STATE LEGISLATURES.
- ALL APPLICABLE RULES, REGULATIONS, NOTIFICATIONS AND BYELAWS UNDER THE CENTRAL AND STATES STATUTES.
- ALL APPLICABLE MUNICIPAL LAWS
- IDENTIFICATION OF EXTENT OF COMPLIANCES MANDATED BY THOSE LAWS, RULES, REGULATIONS, AND BYELAWS, ETC.
- CLASSIFICATION OF NATURE OF COMPLIANCES.
- IDENTIFICATION OF REPERCUSSIONS OF NON-COMPLIANCE OF THE MANDATED PROVISIONS.
- IDENTIFICATION OF REPERCUSSIONS OF NON-COMPLIANCE ON MANAGEMENT AND PERSONAL LIABILITY OF PERSONS LIABLE FOR.
- PREPARATION OF LEGAL & REGULATORY COMPLIANCE CHECKLIST UNDER ALL APPLICABLE LAWS / RULES / BYELAWS / REGULATIONS /NOTIFICATIONS.
- POST COMPLIANCE REQUIREMENT :
- TRACKING OF DEVELOPMENTS AND CHANGES OF ALL LEGISLATIVE & REGULATORY UPDATES.
- UP-DATING INDUSTRY RULES & REGULATIONS.
- MONITORING EXERCISE ON THE BASIS OF LEGAL RESEARCH.
- DEVELOPMENT OF CERTIFICATIONS, REPORTS, REVIEW CHECKLIST, ETC.
- INDEPENDENT PERIODIC REVIEW OF COMPLIACE STATUS.
- IN CASE OF REPEATED NON-COMPLIANCE, TO BRING IT TO THE NOTICE OF MANAGEMENT CONCERN.
- FOLLOW UP ACTION REPORT.
- ISSUE OF COMPLIANCE CERTIFICATE DULY SIGNED BY THE CONSULTING FIRM.
- LAY DOWN EFFECTIVE INTERNAL CONTROL PROCESS.
- TO PREPARE PERIODIC REPORT OF THE COMPLIANCE STATUS AND SUBMIT IT TO THE BOARD OF DIRECTORS THROUGH PROPER CHANNEL.
- BOARD OF DIRECTORS TO REVIEW THE COMPLIANCE REPORT PERIODICALLY AS PER CLAUSE 49 OF THE SEBI GUIDELINES AND FOR ITS DUE DILIGENCE UNDER ALL APPLICABLE LAWS.
Suryashakti Infotech Pvt. Ltd.