SEMINAR AT HOOGHLY CHAPTER OF EIRC OF THE ICSI Sunday, 24 th - - PowerPoint PPT Presentation

SEMINAR AT HOOGHLY CHAPTER OF EIRC OF THE ICSI

Sunday, 24th November, 2019

TOPICS

• 1. ECSIN/UDIN
• 2. NEW COMPLIANCES BY INDEPENDENT DIRECTORS
• 3. RECENT SEBI UPDATES & AMENDMENTS IN SEBI

(PROHIBITION OF INSIDER TRADING REGULATIONS), 2015

• 1. ICSI (EMPLOYEE COMPANY SECRETARIES IDENTIFICATION

NUMBER (eCSIN)

• 2. ICSI (UNIQUE DOCUMENT IDENTIFICATION NUMBER (UDIN)

What is eCSIN? eCSIN is a 17 digit alphanumeric number which enables ICSI to identify a CS employed in a particular Company. Every member of the Institute employed:

• Before 01.10.2019, shall by 31st December 2019 and those who gets

appointed on or after 01.10.2019, shall before such appointment shall

• btain the eCSIN number by registering on the designated portal created

by ICSI at https://ecsin.icsi.edu/Home/MembershipRegistation by entering your membership number and DOB and create a login id and password. After successful login, following details shall be entered- The Competent Authority of ICSI may allot, exempt, alter or otherwise deal with generation of eCSIN on a special request of a member in special circumstances which may be required under the prevailing law or otherwise and may suo motu generate eCSIN in respect of any member or class of members including exempted members. eCSIN shall be generated by the member at the time of issuing the consent letter or the resignation / cessation letter by such member to the employer for any job in any organization, whether as Company Secretary or otherwise, unless exempted.

APPLICABILITY AND PROCEDURE FOR OBTAINING eCSIN

No document is required to be uploaded for creating login id or generating eCSIN.

• 1. Name of the

Company/Firm/Individual

• 2. Employer CIN Number
• 5. Date of offer letter,

date of acceptance & date of joining/cessation

• 3. Employee

designation

• 4. Employer registered

address

• 6. Website of the

employer, mobile number & E-mail Id of the member

The consent letter here means the consent letter to be given in terms of the provisions of section 203 of the Companies Act, 2013 and Rule 8 and Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for appointment of Company Secretary. In case of appointment other than as Company Secretary under section 203 of the Companies Act, 2013, it shall mean the acceptance letter.

SOME KEY HIGHLIGHTS OF eCSIN

The eCSIN is a seventeen-digit system generated random unique alphanumeric number.. eCSIN shall be shared only on registered email id of the members or through any other electronic mode. There shall be no fee for registration at the portal or generation of eCSIN. eCSIN generated at the time of issuing the consent letter or the resignation or cessation letter shall be mentioned along with the membership number on such letter. The consent letter or the resignation letter or the cessation letter containing the eCSIN must be attached to e-form DIR 12 or such other form as may be prescribed under the Companies Act, 2013 and rules made thereunder which is being filed with respect to the appointment or resignation or cessation of any member. Requirement of eCSIN generation shall also not apply in case of Members who are specifically exempted by the Council of ICSI on case to case basis. Quoting eCSIN on the consent letter shall be mandatory for members entering into any employment as a Company Secretary (KMP) or otherwise. A member can generate only one eCSIN for one employer, once at the time of registering the appointment and another eCSIN for the same employer at the time of registering the cessation of that employment. Prospective Employers, Regulatory Body and other stakeholders may at anytime verify the authenticity of eCSIN by visiting the designated website and registering at the designated website. Details required to generate Ecsin- Membership No, Employer CIN No, Employer Registration No, Offer Letter, Consent Letter, Appointment date, Date of Notice of Registration/ Date of Notice of Termination of Employment, Date of Cessation of Employment .

SOME KEY HIGHLIGHTS OF eCSIN

MEMBERS EXEMPTED FROM GENERATING ECSIN

(a) Sitting Members of Parliament or of any State or UT Legislative Assembly (b) Serving Members of Judiciary/Tribunals and Quasi Judicial Bodies (c) Serving Members of Civil Services and allied disciplines (d) Serving Members of Armed Forces and Paramilitary forces (e) Serving Diplomats (f) Members in permanent employment with Central Government, State Government(s), Regulatory Bodies, Government Organizations (g) Members registered with any registered Bar Council of India (h) Members holding Certificate of Practice issued by any other professional bodies in India Provided further that, the requirement of eCSIN generation shall also not apply in case of Members who are specifically exempted by the Council of ICSI on case to case basis.

APPLICABILITY AND PROCEDURE FOR OBTAINING UDIN

What is UDIN? UDIN is a 17 digit alphanumeric number used to verify the authenticity of documents attested / certified by a PCS. Every Practising Company Secretary (hereinafter referred to as ‘the PCS’) shall from 01.10.2019 shall mention the UDIN in the documents certified by him/her by registering on the designated portal and create a login id and password. After successful login, following details shall be entered-

• 1. Document type
• 2. Certificate type for which UDIN has to be created

No document is required to be uploaded for creating login id or generating UDIN. UDIN shall be generated for the following services rendered by PCS:

Companies Act 2013

Certification of Annual Return in Form MGT-8, Secretarial Audit Report under section 204.

SEBI (LODR)

• Reg. 2015
• Issuance of Secretarial Audit Report to material unlisted subsidiaries of listed entities
• Issuance of Annual Secretarial Compliance Report to Listed entities
• Certification that none of the directors on the board of the company have been debarred
• r disqualified from being appointed or continuing as directors of companies
• Certification under Regulation 40(9)

SEBI DP (Regulation s) 2018 Miscellane

• us
• Acting as Compliance Auditor under third party certification/ Audit Scheme(Amendment),

2016 in the State of Haryana.

• Diligence reporting for Banks in case of multiple banking/consortium lending

arrangements in terms of the circular issued by RBI

• Any other forms including any e-form and documents not mentioned above.

Certification under Regulation 76 for Reconciliation of Share Capital Audit.

SOME KEY HIGHLIGHTS OF UDIN

The UDIN shall be a system generated random unique alphanumeric number.. UDIN shall be shared only on registered email id of the members or through any other electronic mode. There shall be no fee for registration at the portal or generation of UDIN. Only Members with a valid Certificate of Practice can register at the designated website. UDIN cannot be generated unless the PCS is registered at the designated website. Only the member certifying the document may generate UDIN. UDIN shall be generated at the time of signing of Certificate / Report / Form / Other Documents or seven days in advance to the date of such signing. Quoting UDIN on the Certificate, Report and Other Documents along with the Certificate of Practice Number shall be mandatory. The details of UDIN generated by a PCS during a Financial Year shall be auto-filled in the application form for renewal of Certificate of Practice. UDIN once generated but not utilized may be surrendered/ cancelled by the PCS within 7 days of such generation. Name of recipient of the professional service, CIN /LLPIN / PAN No. of client (as the case may be) shall be disclosed at the time of generation of UDIN. The Authorities/Regulators/Banks/Others can verify the UDIN indicated on certificate through the UDIN Web Portal.

NEW COMPLIANCES BY INDEPENDENT DIRECTORS NEW COMPLIANCES BY INDEPENDENT DIRECTORS

COMPLIANCE BY INDEPENDENT DIRECTORS

Amendment in Companies (Appointment and Qualification

• f Directors)

Rules, 2014 to be effective from 01.12.2019 Every individual who has been appointed as an independent director in a company :

• On or before 01.12.2019, shall by 1st March 2020 and those who gets

appointed after 01.12.2019, shall before such appointment apply online to the Indian Institute of Corporate Affairs at Manesar, Haryana (an institute established to create and maintain data bank of independent directors), hereinafter referred to as ‘institute’ for inclusion of his/her name in the data bank for a period of one year or five years or for his life-time . Every individual whose name has been included in databank shall file an application for renewal for a further period of one year or five years or for his life-time within 30 days of the expiry of the aforesaid period, failing which, the name of such individual shall stand removed from the data bank

• f the institute.

Every independent director shall submit a declaration of compliance of inclusion of his name in the data bank and renewal process to the Board, each time he submits the declaration (declaration of independence) as required under Section 149 (7) of the Act. Every independent director whose name is so included in the data bank shall pass an online proficiency self-assessment test conducted by the institute within a period of one year from the date of inclusion of his name in the data bank, failing which, his name shall stand removed from the databank of the institute.

SOME KEY HIGHLIGHTS OF ONLINE PROFICIENCY TEST

An individual shall require minimum sixty percent in aggregate to pass in the

• nline proficiency self-assessment test.

There shall be no limit on the number of attempts an individual may take for passing the online proficiency self-assessment test. Exemption from giving online proficiency self-assessment test: Any individual who has served for a period of minimum ten years as on the date of inclusion of his/her name in the databank as Director or KMP in a listed public company or in an unlisted public company having a paid-up share capital of rupees ten crore or more shall not be required to pass the

• nline proficiency self-assessment test.

For the purpose of calculation of the period of ten years referred to in the first proviso, any period during which an individual was acting as a director

• r as a key managerial personnel in two or more companies at the same time

shall be counted only once. Amendment in Companies (Appointment and Qualification

• f Directors)

Rules, 2014 to be effective from 01.12.2019

DUTIES OF THE INDIAN INSTITUTE OF CORPORATE AFFAIRS AT MANESAR (HARYANA)

Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 to be effective from 01.12.2019 The institute shall create and maintain a databank of persons willing and eligible to be appointed as independent directors, and such databank shall be an online databank which shall be placed on the website of the institute.. The data bank shall contain all the necessary details about every person willing and eligible to be appointed as independent director unless such individual restricts his/her personal information to be disclosed in databank. The institute shall conduct an online proficiency self-assessment test covering companies law, securities law, basic accountancy, and such other areas relevant to the functioning

• f an independent director and also

provide an option to take advanced tests in these specified areas and prepare advanced study material for the same. The institute shall charge a reasonable fee from every individual making application for inclusion of their name in the databank and from the companies requiring information about independent directors at the time of their appointment. The institute shall also prepare a basic study material, online lessons, including audio-visuals for individuals giving test. The institute shall not charge any separate fees for any of the mentioned activities.

TOPICS

1. AMENDMENT IN SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015 2. SEBI UPDATE: RESIGNATION OF STATUTORY AUDITORS FROM LISTED ENTITIES AND THEIR MATERIAL SUBSIDIARIES

• 3. SEBI UPDATE: ENHANCED DUE DILIGENCE FOR

DEMATERIALIZATION OF PHYSICAL SECURITIES

AMENDMENT IN SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2019

(EFFECTIVE DATE: 26.12.2019)

PROCEDURE FOR INFORMING ABOUT ALLEGED VIOLATIONS OF INSIDER TRADING LAWS DIRECTLY TO SEBI

Any individual also known as informant here, who is of the opinion that an alleged violation of insider trading laws has

• ccurred may voluntarily submit a Voluntary Information Disclosure Form (VIDF) to Securities and Exchange Board of

India in the prescribed format either himself or through a legal representative. The legal representative shall verify the identity and contact details of the Informant and certify the completeness and accuracy of the information contained in the VIDF and shall submit the same along with a certificate to SEBI. SEBI shall not be required to send any intimation or acknowledgement of receipt or rejection of the VIDF to the informant

• r any other person.

The Office of Informant Protection, a division designated by SEBI for receiving and registering the VIDF shall communicate the substance of the information along with the evidence submitted by the informant to the relevant department or division of SEBI for examination and initiation of necessary action, if any. The Informant Incentive Committee assisted by Office of Informant Protection shall give its recommendations to the Board

• n the eligibility of Informant for Reward and determination of the Reward upon collection or substantial recovery of the

monetary sanctions amounting to at least twice the reward. An Informant eligible for Reward shall file an application within the prescribed time period in the prescribed format for claiming such Reward which shall be payable from Investor Protection and Education Fund.

Limited Review Report/Audit Report for any quarter ended shall be issued by the auditor in the prescribed manner even if the auditor resigns during or after such quarter w.e.f 18.10.2019.

RESIGNATION OF STATUTORY AUDITORS FROM LISTED ENTITIES AND THEIR MATERIAL SUBSIDIARIES

SEBI vide its circular dated 18.10.2019 has specified conditions to be complied with upon resignation of the statutory auditor of a listed entity/material subsidiary w.r.t. limited review/audit report under SEBI (LODR) Regulations, 2015. In any instance where the audit process gets hampered, the auditor shall approach the Chairman of the Audit Committee who shall receive all the concerns directly and immediately without specifically waiting for the quarterly Audit Committee meetings. The auditor shall report all concerns relating to its proposed resignation to the audit committee and shall also provide an appropriate disclaimer in the audit report relating to non-receipt of information from the listed entity or its material subsidiary. The terms of appointment of the statutory auditor shall include all the above details and the annual secretarial compliance report as required to be given by PCS under Regulation 24A of SEBI (LODR) Regulations, 2015 shall include the compliance certification of the same. The listed entity/its material subsidiary shall obtain information from the Auditor upon resignation in the prescribed format and disclose the same to the stock exchanges as per Regulation 30 of SEBI (LODR) Regulations, 2015. The Audit Committee shall deliberate upon all the concerns raised by the auditor upon its resignation and express its views to the listed company at the earliest and the listed company shall disclose the same to the stock exchange within 24 hours. The provisions of this Circular shall not apply if the auditor is rendered disqualified as per section 141 of Companies Act 2013.

ENHANCED DUE DILIGENCE FOR DEMATERIALIZATION OF PHYSICAL SECURITIES

SEBI vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (IV Amendment) Regulations, 2018 prohibited transfer of securities held in physical mode w.e.f. 01.04.2019. SEBI further vide its circular dated 05.11.2019 has directed to implement a due diligence process where all listed companies or their RTAs shall provide data of their members holding shares in physical mode,

• viz. the name of shareholders, folio numbers, certificate numbers, distinctive numbers and PAN etc.

(hereinafter called static database) as on 31.03.2019, to the Depositories, latest by 31.12.2019 in the format to be prescribed by the Depositories. Depositories will then capture the relevant details from the static database submitted and put in place systems to validate any dematerialization request received after 31.12.2019.i.e. the Depository system shall retrieve the shareholder name(s) recorded against the folio number and certificate number in Static Data for each DRN request received after 31.12.2019 and validate the same against the demat account holders name as available in the records of the Depositories. In case of mismatch of name on the share certificate(s) vis-à-vis name of the beneficial owner of demat account, the depository system shall generate flag/alert and ask for additional documents. In the case of complete mismatch of name on the share certificate(s) vis-à-vis name of the beneficial

• wner of demat account, the applicant may approach the listed company/RTA for establishing his title/
• wnership.

THANK YOU

For any queries kindly contact: Sanu Agarwal B.com (H), Company Secretary Ph- 9038269142 / 7003147407 Email- cssanuagarwal@gmail.com