WHY COMPLIANCE OFFICERS OF SOME LISTED COMPANIES ARE RESIGNING THEIR POSITION OF LATE ?

 WHY COMPLIANCE OFFICERS OF SOME LISTED COMPANIES ARE RESIGNING THEIR POSITION OF LATE ?

MANDATORY APPOINTMENT OF COMPLIANCE OFFICER FOR LISTED COMPANIES

SEBI expects numerous compliances from listed entities and vide SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) establishes a framework for corporate governances applicable to every entity listed with stock exchange(s) in India.

One of the primary requirements of the LODR is the appointment of a qualified company secretary in the capacity of a compliance officer, to ensure conformity with SEBI regulations in letter as well as spirit.

In majority of the cases, as per the PIT Regulations, a compliance officer could be any senior officer who is designated so and is reporting to the board of directors and in normal course , Company Secretaries are designated as Compliance Officer in a listed company.

Compliance officer being one of the key personnel has an important role to play in the company for monitoring adherence to SEBI regulations, preservation of price sensitive information and implementation of code.

WHAT ARE THE ROLES AND RESPONSIBILITIES OF A COMPLIANCE OFFICER?

• To carry out due diligence on the company’s records.
• To Handle Quarterly, half-yearly& annual compliances.
• To liaison before stock exchanges on behalf of the company and to take care of compliancesf PIT Regulations , Insider trading and LODR provisions.
• To authenticate all legal documents of the company.
• To bridge the gap between the company and investors.
• To draft minutes and keep records of all statutory meetings.
• Implementation and management of compliance reporting to all the statutory bodies.

POOR SALARY , IMPROPER TREATMENT OF COMPLIANCE OFFICERS

A Compliance officer has so many responsibilities and compliances to be under taken other than SEBI LODR ,PIT & Stock Exchange regulations in the case of listed companies. However , majority of listed companies pay very minimum salary as compared to their over burden work nature. Many compliance officers are under stress and send sleepless nights worrying about the compliances. Poor salary , improper treatment of compliance officers by listed companies management make them to resign their jobs at frequent intervals.

What are the compliance requirements for a company?

Some of those important laws have been briefly explained below:

Factories Act, 1948: An Act dedicated to the occupational safety, health and welfare of workmen employed at factories or manufacturing units.

Employees Provident Fund (EPF) Act, 1952: Provisions dedicated to the security of an employee after retirement from service.

Employees’ State Insurance (ESI) Act, 1948: An Act containing health safety provisions to grant security to employees against risks during employment.

Professional Tax Act (State Laws): Some states in India like Telangana, and Maharashtra have imposed taxes on certain professions including trades and employment.

Labour Welfare Fund Acts (State Laws): States like Haryana, Punjab, Maharashtra etc. have this legislation to finance certain activities dedicated to the welfare of the labour.

Maternity Benefit Act, 1961: The legislation protects the employment of a woman during her maternity period through certain benefits.

Contract Labour (Regulation and Abolition) Act, 1970: An Act to protect contract labour and to ensure safe work conditions for them.

Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013: A legislation to protect women against any sexually coloured acts or remarks at the workplace and ensure a safe work environment.

Minimum Wages Act, 1948: An Act dedicated to the fixation of minimum wage rates in certain occupations.

Payment of Wages Act, 1936: Provisions for regulation of period of wages and to provide a remedy against unexplained or unauthorised deductions.

Payment of Gratuity Act, 1972: An Act that requires certain industries or employers to pay their retiring employees a one-time gratuity amount.

Payment of Bonus Act, 1965: Based on the profits of a company, the Act obliges employers to designate the minimum and maximum bonus percentage.

Equal Remuneration Act, 1976: A legislation to prevent any discrimination at the workplace based on gender.

Compliances under GST Act, Income –Tax Act.

CONCLUSION

The role of compliance officer in a listed company for the aforesaid reasons is abound with risks for a professional from a regulatory perspective. Therefore, it is extremely important for the professional to meticulously examine the applicable SEBI regulations while accepting the role of a compliance officer and negotiate on matters such as D&O liability insurance or indemnity protection prior to accepting such a position in a listed entity.