In this write-up, we are about to get some quick knowledge about the compliance officer in a listed entity. By listed entity, we mean a public company whose share or debentures are listed on any stock exchange for trading. A Compliance Officer is a person responsible for the compliance management of a listed entity. Coming to the point directly that who can be appointed as a Compliance Officer of a listed company.

Who is a Compliance Officer?

An employee of the company is responsible to take care of the regulatory framework for the company and also following internal controls for in-time compliance. He ensures transparency, accountability and identifies legal risks,s and manages them in an effective manner.

It is a person of integrity and discipline who keeps a record of every statutory record and provides corporate legal advice to the board.

Who is eligible to be appointed as a Compliance Officer?

As stated in Regulation 6 of SEBI (Listing obligation & disclosure requirement), 2015. A Qualified Company Secretary shall be appointed as a Compliance Officer in a Listed Company. Company Secretary as defined under Section 2(1)(c ) of the Company Secretaries Act, 1980 Or Who is appointed by the Company to perform the functions of a Company Secretary.

According to The Companies Act, 2013 it is a mandatory requirement of a listed company to appoint a company secretary and the same person can perform the role of a compliance officer.

What are the roles and responsibilities of a Compliance Officer?

  • To carry out due-diligence of company’s records.
  • To Handle Quarterly compliances.
  • To liaison before stock exchanges on behalf of the company.
  • To authenticate all legal documents of the company.
  • To bridge the gap between company and investors.
  • To draft minutes and keep records of all statutory meetings.
  • Implementation and management of compliance reporting to all the statutory bodies.

Listed entities are required to comply with the Quarterly and Half-yearly compliances in which the compliance officer plays an important role.

What is the procedure to appoint a Compliance Officer in a listed entity?

Once a company finalized a qualified candidate to be appointed as company secretary cum compliance officer. The hiring department is required to give details of the candidate to the Nomination and Remuneration Committee. NMR Committee shall hold the meeting and consider the application for the post of Compliance officer and draft their proposal for approval of directors in their board meeting.

A board meeting shall be convening to pass the resolution regarding the appointment of a company secretary as a compliance officer. Designated official shall intimate to stock exchange about the appointment of a compliance officer along with details of the candidate.

Within 30 days of the board meeting the authorized person is required to file e-form DIR 12 and MGT 14 along with Board resolution, consent for an appointment, appointment letter, and identity proof to MCA. The e-forms shall be filed in conformity with the Companies Act, 2013 and the same shall be certified by a Practicing professional.

The following shall be the draft Board Resolution for appointment of a Company secretary cum Compliance officer.

CONSIDERATION AND APPROVAL FOR APPOINTMENT OF MRS. SHARMA AS THE COMPANY SECRETARY CUM COMPLIANCE OFFICER (KEY MANAGERIAL PERSONNEL) OF THE COMPANY.

“RESOLVED THAT pursuant to the provisions of Section 179, 203,  of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable provisions of the Companies Act, 2013 and all other applicable provisions, if any, (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and on the basis of recommendation of Nomination and Remuneration Committee, the consent of the Board of Directors be and is hereby accorded to appoint Mrs. Sharma, an Associate Member of the Institute of Company Secretaries of India having membership no. ACS 00000, as Company Secretary (Key Managerial Personnel) of the Company, w.e.f. 16th October 2021 on such terms and conditions including remuneration as placed before the Board.

RESOLVED FURTHER THAT Mr. Listed Verma, Chairman cum Managing Director (DIN: 00000000) and Mr. Listed Joshi, Director (DIN: 00000000) of the Company be and are hereby severally authorized to alter, revise, modify, enlarge the said terms and conditions in consultation with Company Secretary and to take all such steps as may be necessary, proper or expedient and to do all such acts, deeds and things as may be necessary to give effect to the foregoing resolution

What are the penal provisions for Non- Appointment of a Compliance Officer in a listed entity?

As per SEBI Circular SEBI/HO/CFD/CIR/P/2016/116 dated October 26, 2016, any Non-compliance related to Regulation 6(1) for appointment of a Whole-Time Company Secretary as a Compliance Officer is Rs. 1000 per day till the defaults continue starting from the date when the company is bound to appoint a compliance officer.

Every Listed company is required to appoint a Company Secretary before the listing procedure. The date from which penalty shall be levied is from the date of listing of the company at stock exchange.

CONCLUDING NOTES: Though it’s mandatory for a listed company to appoint compliance officer on the other side every unlisted company whether public, private or government-oriented is required to appoint a whole-time company secretary for ensuring compliance is the Paid-Up capital of the company is Rs. 10 crore or more as stated under section 203 of the Companies Act, 2013.

By csannusharma

Annu Sharma is a qualified Company Secretary as well as a Certified CSR Professional and a Law graduate with rich experience of 4 years in secretarial, corporate legal affairs, management and corporate governance; in different industry sectors. Featured on Tax Guru.In, Compliance Calendar LLP and Blogger.com.