The Government in its implementation of the new Companies Act 2013 has moved ahead and issued the 3rd Tranche of Draft Rules under Companies Act 2013 which covers the proposal to set up a National Financial Reporting Authority (NFRA). The Draft Rules for following 3 chapters under the Companies Act 2013 has been made live for public comments in the 3rd phase of implementation.
- Chapter V – Acceptance of Deposits by Companies
- Chapter IX – Accounts of Companies (National Financial Reporting Authority (NFRA))
- Chapter XIV – Inspection, Inquiry and Investigation
Please also see the NFRA related rules under Chapter IX.
The last date of receiving comments on these rules is 31st October 2013
Besides the creation of NFRA, the 3rd set of Draft Rules also relate to the Serious Fraud Investigation Office (SFIO) and the acceptance of deposits by Companies.
The latest tranche pertains to Chapter V (Acceptance of Deposits by Companies), Chapter IX (NFRA) and Chapter XIV (Inspection, Inquiry and Investigation).
The first and second tranches of draft rules had covered 16 and 9 chapters respectively. The new legislation has 29 chapters. Some salient features of the 3rd Set comprising the NFRA:
- The Act proposes the NFRA to have powers to lay down accounting and auditing policies and standards for adoption by companies or class of companies or their auditors.
- The NFRA will be responsible for monitoring and ensuring compliance with accounting and auditing standards.
- The new Act will also give more teeth to the Serious Fraud Investigation Office (SFIO) that is currently investigating many high profile fraud cases which include the recent Saradha chit fund scam.
The Ministry of Corporate Affairs has already received thousands of comments on its first 2 sets of draft rules released earlier. The comments received by the ministry also includes issues related to spending and auditing of Corporate Social Responsibility (CSR).