MCA Frames Policy for Public Consultation in Rule-Making

The Ministry of Corporate Affairs (MCA) has formulated a policy on public consultation with respect to framing and reviewing of rules and regulations issued under legislations administered by it. It is clarified that the policy is advisory in nature and though it was published on January 15, the policy will be effective from January 1.

Such a framework was considered necessary to enhance stakeholder participation and ensure transparency in framing rules and regulations. Moreover, the inconsistency in the practice of public consultation followed by regulators such as IBBI, CCI, etc. in regulation-making was taken note of by the Ministry.

The legislations administered by the MCA include the Companies Act, 2013, the Limited Liability Partnership Act, 2008, the Competition Act, 2002, the Insolvency and Bankruptcy Code, 2016, and those relating to the three professional institutes (ICAI, ICSI, and ICOAI).

The divisions of and the regulators administered by the Ministry are expected to comply with the policy within the confines of the legislations, depending on the feasibility. The policy is divided into two parts; provisions pertaining to holding of public consultation at the time of framing rules and regulations are contained in Part A, and those with respect to review of existing rules and regulations are provided under Part B. When it comes to Part B, it is specified that the exercise of comprehensive review has to be completed in FY 2024-25.

In line with this policy, the Ministry has sought comments from stakeholders on the rules issued under the Companies Act, 2013, and the Limited Liability Partnership Act, 2008.[1]