Union Ministry of Corporate Affairs Current Affairs - 2019
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A formal Memorandum of Understanding (MOU) was signed between Union Ministry of Corporate Affairs (MCA) and Securities and Exchange Board of India (SEBI) for data exchange between two regulatory organizations and to tighten regulatory oversight.
Key Highlights of MoU
- The MoU was signed by Shri K.V.R. Murty, Joint Secretary (MCA) and Smt. Madhabi Puri Buch, Whole Time Member of SEBI in presence of senior officers from both organisations.
- Need: As private sector plays an increasingly vital role in economic growth of India, thus need of the hour is a robust Corporate Governance mechanism for transparent functioning.
Key Features of MoU
- It facilitates sharing of data & information and ensures seamless linkage for regulatory purposes between MCA and SEBI on a regular and automatic basis. In addition to regular exchange of data, both SEBI and MCA will also exchange with each other, any information available in their respective databases on request, for purpose of carrying out scrutiny, investigation, inspection and prosecution.
- It enables sharing of specific information like sharing details of suspended/delisted companies, financial statements filed with Registrar by corporates, shareholding pattern of companies, returns of shares allotment and audit reports relating to corporates.
- The MoU is an ongoing initiative of MCA and SEBI, who are already collaborating via various existing mechanisms. It comes into force with immediate effect from date it was signed.
- Data Exchange Steering Group has been constituted for fulfillment of undertaken initiative. It will meet periodically to review data exchange status and also take steps to further improve effectiveness of the data sharing mechanism.
- Significance: This MoU comes in wake of increasing need for surveillance in context of Corporate Frauds affecting important sectors of economy. Thus MoU marks beginning of a new era of cooperation and synergy between two crucial regulators in Indian economy.
About Securities and Exchange Board of India
- It is the regulator for securities market in India.
- Background: It was established on 12 April 12 1988 as a non-statutory body. It was accorded statutory status in accordance with provisions of Securities and Exchange Board of India Act, 1992.
- Function: It is a quasi-legislative, quasi-executive and quasi-judicial body. It can draft regulations, conduct inquiries, pass rulings and even impose penalties.
Tags: Indian Economy • Memorandum of Understanding • MoU • SEBI • Securities and Exchange Board of India • Shri K.V.R. Murty • Smt. Madhabi Puri Buch • Statutory Body • Union Ministry of Corporate Affairs
The Union Ministry of Corporate Affairs (MCA) has constituted High Level Committee on Corporate Social Responsibility – 2018 (HLC-2018) under Chairmanship of Injeti Srinivas, Secretary, MCA. It will review existing framework and guide and formulate roadmap for coherent policy on Corporate Social Responsibility (CSR).
Committee’s Terms of Reference
It will review existing CSR framework as per Act, Rules and Circulars issued from time to time and recommend guidelines for better enforcement of CSR provisions. It will analyze outcomes of CSR activities, programmes and projects and suggest measures for effective monitoring and evaluation of CSR by companies. It will also give suggestions on innovative solutions, use of technology, platform to connect stakeholders, and social audit. It will submit its report to Government within three months from date of holding its first meeting.
Corporate Social Responsibility (CSR)
CSR is referred as initiative undertaken by CST to assess and take responsibility for company’s effects on environment and impact on social welfare and to promote positive social and environmental change. Its basic philosophy is that income is earned only from the society and therefore it should be given back. Thus, CSR aims at promoting responsible and sustainable business through inclusive growth.
The provisions of section 135 of Companies Act, 2013 (Act) pertains to CSR. The existing provisions of in Companies Act, 2013 fully empower Board of Company to decide on their CSR Policy, approve projects and oversee implementation. Under this Act, any company with net worth of Rs 500 crore or more or turnover of Rs 1000 crore or more o net profit of Rs 5 crore or more has to spend at least 2% of last 3 years average net profits on CSR activities as specified in Schedule VII of Act.