SEBI approved the new Corporate Governance norms
The Market regulator, Securities and Exchange Board of India (SEBI) approved the new corporate governance norms that restrict the number of independent directors on a company board, spell out whistleblower policies and institute checks on salaries of key managerial persons, among other things.
Beside new corporate governance norms, SEBI board also:
- Approved new KRA (KYC Registration Agency) Regulations that would make it easier for the investors to comply with Know Your Client (KYC) requirements across various segments of the capital markets.
- Also approved the long-term policy for mutual funds in India where the minimum capital requirement for asset management companies (AMC) has been raised from Rs 10 crore to Rs 50 crore.
- Proposed the government to allow the Employees’ Provident Fund Organization (EPFO) to invest up to 15% of their corpus in equities and mutual funds.
- Also proposed to allow an income tax exemption under 80C of Rs 2 lakh for investments in select mutual funds but the move would require government approval and an amendment of the Income Tax Act.
Excerpts of new corporate governance norms
- Restricted independent directors to serve as directors on a maximum of 7 listed companies and limited their total tenure to two terms of 5 years each..
- In case a person is a whole time director in a listed company, then he can only be on three boards.
- If somebody has already been independent director for more than five years, then he can get only one extra term of 5 years.
- The companies would also need to adopt a whistle-blower policy for employees, while the number of directorship a person can hold on company boards would be capped, among various other measures to safeguard the interest of minority shareholders.
- At least one woman director on the Board of the company.
- Now, Companies will have to disclose remuneration policies of CEOs and executive directors, related-party transactions and appointment and resignations of independent directors.
Note: The new corporate governance norms will be effective from October 1, 2014 for all listed companies and are based on recommendations made by the industrialist Adi Godrej committee.
Categories: Business, Economy & Banking