SEBI Chairman Ajay Tyagi Gets 18 Month Extension till February 2022
Ajay Tyagi, the chairman of Securities and Exchange Board of India (SEBI) has been granted an extension for next 18 months. Earlier, in February this year, he was given six months extension. 
 
A notification issued by the secretariat of the appointments committee of the Cabinet, says, "(the) committee has approved the extension of term of appointments of Ajay Tyagi as chairman, EBI for a further period of 18 months from 1 September 2020 up to 28 February 2022 or until further orders, whichever is earlier."
 
 
With Mr Tyagi receiving an extension for 18 months, he would have the third-longest tenure at the helm of SEBI. Two long serving chiefs of the market regulators are: DR Mehta, who was SEBI chairman during 21 February 1995 to 20 February 2002, followed by UK Sinha from 18 February 2011 to 1 March 2017.
 
Earlier in February this year, the government has extended the tenure of Mr Tyagi by six months till August end. A gazette notification issued by the finance ministry in end-February had said: “…the central government hereby extends the term of appointment… for a period of six months beyond 29 February 2020 or until further orders, whichever is earlier.” 
 
On 1 March 2017, Mr Tyagi assumed charge as SEBI chairman. Prior to this, he was additional secretary in the department of economic affairs under Union ministry of finance, handling portfolios of capital market division, investment division, infrastructure division and currency and coinage division.
 
Interestingly, Mr Tyagi was initially appointed for a five-year term, which was suddenly reduced to three years. Eventually, with this decision, he will be serving a five-year term. 
 
A decision to give SEBI chairmen a five-year term was made during CB Bhave’s tenure and has been the subject of a great deal of controversy, as has been described in former chairman UK Sinha’s recently released book on his years at SEBI.  
 
Mr Sinha too had the second longest term at SEBI with multiple extensions. DR Mehta’s controversial seven-year term, which ended after the Ketan Parekh scam, is the longest that any chairman has served. 
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    COMMENTS

    amootha

    2 months ago

    when will sebi come out with a gudielines for banks on violations observed under sec 4 1 and 2 of the listing obligations and disclosure regulations

    80% of Internal Auditors Face Barriers while Getting Involved in Fraud Risks Management: Survey
    A vast majority of internal auditors is facing barriers while getting involved in managing fraud risk, despite almost two-thirds saying they had seen an increase in fraud incidents over the past five years, reveals a survey.
     
    The survey, conducted by Kroll and Internal Audit Foundation and presented in a new research report titled "Fraud Risk Management in Internal Audit", says, "80% of internal auditors face barriers to involvement in fraud risk management, while nearly half say internal audit not involved in strategic decision making. About 60% of respondents, who said they were extremely involved in enterprise-wide fraud risk management reported that the fraud risk management process was very effective or excellent, compared with 31% of those who were very involved."
     
     
    According to Tarun Bhatia, managing director and head of South Asia at Kroll, "as the pandemic continues to affect and transform the way we do business, new risks and frauds are emerging, making it an ever more challenging environment for companies to operate." 
     
    "The current conditions where businesses are suffering, people are desperate, system and processes are compromised, can lead to a perfect platform for fraud to occur and go undetected. These extraordinary circumstances demand for a greater emphasis on fraud risk management," he says.
     
    The report shows a clear disconnect between fraud risk assessment and resulting strategic plans. Almost half of survey respondents felt that internal audit teams were not part of enterprise-wide strategic decision making, even though 91% said that they had at least some role in assessing fraud risk.
     
    "Following recent scrutiny of the external audit profession globally, the focus is turning to companies' internal defences against fraud, of which internal audit can be a key participant and India is no different," Mr Bhatia says, adding, "Traditionally internal audit as a function has been outsourced and lacked management focus. A stronger and specific mandate for internal audit and increased focus of boards towards strategic fraud risk management will add significant value and ultimately contribute to reducing incidents of fraud. Greater accountability on and support from internal audit will help companies to detect fraud earlier, and speedy investigation and remediation can be carried out when issues occur. To make this happen, there needs to be complete support from the senior management, adequate resource allocation, and recruitment of people with the necessary skillsets."
     
    As per the survey, where internal audit was part of the strategic risk management of fraud, the process was perceived as more effective overall. Those who felt that their organisation's risk management process was 'very good' or 'excellent' increased from 31% to 60% between respondents who were 'very involved' and those who were 'extremely involved' in fraud risk management. 
     
     
    For those respondents who said they were 'minimally involved' or 'not involved' in the fraud risk management process, only 12% felt that their effectiveness was 'very good' or 'excellent', with over half stating that overall, the fraud risk management programme was fair or poor. 
     
     
    A third (33%) of respondents said a lack of resources was the biggest obstacle to internal audit being more involved in fraud risk management processes. A further one in four (23%) cited lack of mandate as the most significant barrier, followed by one in five (21%) who cited concerns over potential conflicts of interest. 
     
     
    In a webinar quick poll of 1,750 internal auditors conducted by Kroll and The IIA in July 2020, it was revealed that two-thirds (65%) of internal audit professionals felt that COVID-19, remote working, and financial strains would result in an increased risk of fraud. Over three quarters (77%) agreed that, if internal audit were more involved in strategic fraud risk management, the fraud risk management process would improve.
     
    According to Richard F Chambers, president and chief executive (CEO) of The Institute of Internal Auditors, it is vital for organisations of all sizes and industries to have boards, executive management, and internal audit leaders who are well aligned in their approach to managing risk, including fraud. 
     
    "Internal audit plays a critical role, with other surveys supporting these findings that, when internal audit is involved, the impact of fraud is lessened. That is because internal audit is well-positioned due to its enterprise-wide view of an organization to identify vulnerabilities for potential fraud and, in some cases, even to investigate. What is clear is that internal auditors know how to follow the risks. But they must have the resources to assess the exposure to potential fraud, ensure internal controls are in place and effective to limit such risks, and to offer assurance that risk management processes are robust and appropriately implemented," he added.
     
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    Listed Companies May Approach SEBI Against Proxy Advisory Firms
    A day after issuing procedural guidelines for proxy advisory firms, the Securities and Exchange Board of India (SEBI) said on Tuesday that listed companies can approach the regulator for resolution of grievances against such firms.
     
    In a circular issued on Tuesday, SEBI noted that proxy advisers, over the past few years, have played a key role in enabling shareholders to effectively participate in corporate governance decisions, thus furthering the achievement of the above objectives.
     
    Proxy advisers provide advice to institutional investors or shareholders of a listed entity, in relation to exercise of their rights in the company, including voting recommendation on agenda items.
     
    However, due to the inherent nature of the work, it is probable that proxy advisers and listed entities may have different views on any agenda item of the listed entity leading to grievances, it said.
     
    "In order to facilitate resolution of such grievances of listed entities against SEBI registered proxy advisers, the listed entities may approach the SEBI. The SEBI will examine the matter of non-compliance by proxy advisers," the circular said.
     
    The provisions of the circular will come into effect from 1 September 2020.
     
    On Monday, the security market regulator had come up with a set of procedural guidelines for proxy advisers.
     
    Among other compliance norms, the SEBI said proxy advisers shall disclose conflict of interest on every specific document where they are giving their advice.
     
    Sonam Chandwani, managing partner at KS Legal & Associates, said: "This procedural overhaul laying out the processes for disclosure management and mitigation of the potential conflict of interest resulting from ancillary business activities can be addressed with relative ease."
     
    "Apart from deterring the creation of Chinese walls between proxy firms and their consultancy firms, this move indicates a clear approach on managing the concerns pertaining to independence that can impact recommendations provided to clients, thereby addressing the core problem of interest conflicts," she said.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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