RELAXATIONS WITH RESPECT TO INCLUSION OF NAME OF INDEPENDENT DIRECTORS IN THE DATA BANK MAINTAINED WITH INDIAN INSTITUTE OF CORPORATE AFFAIRS AT MANESAR. – Eshwars
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RELAXATIONS WITH RESPECT TO INCLUSION OF NAME OF INDEPENDENT DIRECTORS IN THE DATA BANK MAINTAINED WITH INDIAN INSTITUTE OF CORPORATE AFFAIRS AT MANESAR.

Authored by Adit N Bhuva

Brief background on data bank of independent directors:

The Ministry of Corporate Affairs (“Ministry”) had with effect from 1st December 2019, for the following category of persons, introduced the requirement of registering with the Institute Indian Institute of Corporate Affairs at Manesar (“Institute”) for the purpose of inclusion of their name in the data bank for the independent directors:

(i) Persons who are already independent directors in a company, are required to get their name included in the data bank within 13 months from 1st December 2019 i.e., on or before 31st December 2020;

(ii) Persons intending to be appointed as independent directors have to get their name included in the data bank, prior to their appointment.

Requirement of an online proficiency self assessment test:

In addition to getting their name included in the data bank, the Independent Directors, will have pass an online proficiency self assessment test conducted by the Institute within a period of 1 year form the date of inclusion of their name in the data bank.

Relaxations provided:

The Ministry, on 18th December 2020, has provided the following relaxations with respect to the requirement of online proficiency self assessment test:

S.No. Particulars

 

(Column A)

Earlier requirement

(Column B)

Relaxation provided

 

(Column C)

1. Time limit for passing the online proficiency self-assessment test Time period of one year (from the date of inclusion of name in the data bank) was provided to pass an online proficiency self-assessment test. This time limit has been extended to 2 years.
2. Exemption from requirement of the online proficiency self-assessment test Exempted, if an Individual has served as a director or key managerial personnel for a total period of not less than 10 years in any of the following:

 

(a) listed public company; or

(b) unlisted public company having a paid-up share capital of Rs. 10 crore or more; or

(c) body corporate listed on a recognized stock exchange

 

(“herein after referred to as “Prescribed Entities”)

The time of serving in the Prescribed Entities has been reduced from 10 years to 3 years and in addition to the list of entities provided in Column (B), the following list of entities have been added:

 

(A) Director or key managerial personnel in a:

 

(i) body corporate listed on a stock exchange in a country which is a member state of the Financial Action Task Force on Money Laundering and the regulator of the securities market in such member state is a member of the international organization of securities commission;

(ii) Bodies Corporate incorporated outside India having a paid-up share capital of US$ 2 million or more;

(iii) Statutory Corporations set up under an Act of parliament or any state legislature carrying on commercial activities; or

(B) If a person was in a pay scale of Director or above in the Ministry of Corporate Affairs or the Ministry of Finance or Ministry of Commerce and Industry or the Ministry of Heavy Industries and Public Enterprises and having experience in handling the matters relating to corporate laws or securities laws or economic laws; or

(C) If a person was in a pay scale of Chief General Manager or above in the SEBI or RBI or IRDAI or Pension Fund Regulatory and Development Authority and having experience in handling the matters relating to corporate laws or securities laws or economic laws

3 Pass percentage for clearing the online proficiency self-assessment test The pass percentage was 60%. Now the pass percentage has been reduced to 50%.

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