MINISTRY OF CORPORATE AFFAIRS
Draft Policy for Pre-Legislative consultation and
comprehensive review of existing Rules and
Regulations
INTRODUCTION
Ministry of Corporate Affairs (MCA) is primarily responsible for
administering the Companies Act, 2013, LLP Act, 2008, IBC-2016,
Competition Act, 2002 and legislations relating to the Three Professional
Institutes (PIs), namely Institute of Chartered Accountants of India (ICAI),
Institute of Company Secretaries of India (ICSI) and Institute of Cost
Accountants of India (ICOAI). Various Rules have been prescribed by the
Ministry under respective legislations. The Regulators (viz. the IBBI, CCI,
ICAI, ICSI, ICoAI ) established under respective Statutes have framed
regulations as required. NFRA does not, at present, have statutory
authority to make regulations.
2.1 MCA has generally undertaken public consultation at the stage of
framing or making amendments in the principal legislations. The
recommendations of the relevant Committees (CLC, ILC, etc.) are placed
on the website of the Ministry for public comments. Attention of the
Industry Chambers, Professional Institutes, Regulatory Bodies etc. is
drawn to the process of consultation. In many cases, public comments
received are analysed through statements giving Ministry’s observations
on such comments. These are not placed in public domain.
2.2 While rules are framed by the Ministry, the concerned regulators
frame regulations. The practice of public consultation for regulation
making is not uniform across all regulators. IBBI has issued a regulation
in 2018 about the manner of public consultation. Statutes governing the
Three PIs mandate publication of draft regulations for public consultation
before finalising the regulations. Until a recent amendment was made in
year 2023 in the Competition Act, the CCI did not engage in a
consultative process while framing regulations. As far as amendments in
rules are concerned, the process of public consultation is not being
currently followed in all cases, although original rules for Companies Act,
2013 and Limited Liability Partnership Act, 2008 were published for
carrying out such consultation.
NEED FOR PUBLIC CONSULTATION IN RULE/REGULATION MAKING