NFRA needs to have standalone legislation, says chief R Sridharan

National Financial Reporting Authority (NFRA) Chairperson R Sridharan on Thursday pitched for having a "standalone legislation" for the regulator in the interest of autonomy. The regulator was constituted under Sub Section (1) of Section 132 of the Companies Act, 2013, in October 2018.

Sridharan said the NFRA operates under a single section of the Companies Act. The section does not provide comprehensive coverage of all the functions and powers that are required to constitute the NFRA as a "corporate financial reporting regulator".

Further, he noted that the statute treats the NFRA as a subordinate office of the corporate affairs ministry.

"... in the interest of functional, financial and administrative autonomy of the NFRA, there is a compelling need for a standalone legislation.

"This will be the key to build up the regulatory capacity of the NFRA," he said while speaking at a conference organised by industry body CII.

The Technical Advisory Committee (TAC) of the NFRA has been entrusted with the task of developing a draft law, he added.