NFRA May Gain Drafting & Penal Powers Under Proposed Amendments

The National Financial Reporting Authority (NFRA) is set to receive powers to draft regulations under the Corporate Laws (Amendment) Bill, 2025, which will amend the Companies Act, 2013, and the LLP Act, 2008.

The Bill will allow NFRA to frame regulations in specific situations and create a dedicated fund to give the audit regulator financial autonomy. An official said these powers will help NFRA act faster on matters that need immediate attention, similar to regulators such as SEBI, RBI, and IRDAI. The NFRA chairperson will also gain authority over administrative decisions. The new fund will cover salaries and expenses of the regulator, reducing dependence on central government support. Experts said the reform strengthens audit oversight and allows quicker action on non-compliance. The Bill is also expected to expand NFRA’s powers to penalise auditors and firms for administrative violations, including delays in filing NFRA-2.