With the last working day of the year coming to a close, the Securities & Exchange Board of India declined to extend the deadline for compliance with the new corporate governance rules in clause 49 of the stock exchange listing agreement, but announced a few concessions that will allow CEOs and CFOs to breathe a little easier.
Sebi chairman M Damodaran said that there would be no more extensions on Clause 49. It would be applicable from the New Year. “Any failure to comply with it will invite action under the listing regulations,” he said.
But what must have cheered corporate India was Sebi’s directive on the certification of internal controls by the chief executive officer and the chief financial officer.
“As per Clause 49, the CEO and CFO certifications are required only for financial reporting and not for other systems,” said Damodaran. This, he claimed, was in keeping with the Sarbanes-Oxley Act, instituted in the US to infuse transparency in the corporate system after the Enron and Worldcom debacles.
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