SEBI expands scope of term ‘auditor’; allows LLPs to audit books of Companies

NOTIFICATION NO. SEBI/LAD-NRO/GN/2022/84, dated 10.05.2022

The SEBI has notified the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2022. Amendments have been made in Regulation 2, 9, 9A, 9B, 14, 24, 30, 31, 32, 35 and Ninth Schedule. Now, an ‘auditor’ means a firm, including a LLP, constituted under the LLP Act, 2008, who is eligible and qualified to audit the accounts of a company u/s 141 of the Companies Act, 2013.

Further, a new clause has been inserted in the Regulation 2 of the SEBI (Collective Investment Schemes) Regulations, 1999 namely as ‘designated employees’ of the Collective Investment Management Company which includes the following –

(a) chief executive officer, chief investment officer, chief risk officer, chief information security officer, chief operation officer, fund manager, compliance officer, sales head, investor relation officer, heads of other departments and dealer of the Collective Investment Management Company.

(b) persons directly reporting to the chief executive officer (excluding personal assistant/ secretary)

(c) fund management team and research team

(d) other employees as identified by Collective Investment Management Companies or trustees

Under the extant norms, ‘auditor’ means only a person qualified to audit the accounts of Companies under the Companies Act, 2013. Further, no clause related to the ‘designated employees’ was covered in the Regulation 2 of the scheme.

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