MCA flags jurisdiction issue over ICAI's Global Networking Guidelines
Jul 14, 2026
Ministry's observations centre on who should issue the framework; ICAI pauses rollout and president is likely to discuss the matter with MCA officials.
The Ministry of Corporate Affairs (MCA) has raised concerns over the Institute of Chartered Accountants of India's (ICAI) proposed Global Networking Guidelines, with the ministry's observations centred on whether a framework carrying regulatory implications should be issued by the government rather than the accounting regulator, people aware of the matter told ETCFO.
Following the discussions, ICAI has, for the time being, paused the rollout of the proposed Global Networking Guidelines despite having completed stakeholder consultations and finalised the proposed framework, according to multiple people familiar with the development.
The matter is expected to be discussed between ICAI President CA. Prasanna Kumar D and senior MCA officials as deliberations continue on the way forward, the people said.
Focus on jurisdiction rather than content
People familiar with the discussions said the ministry's observations are not primarily related to the substance of the proposed Global Networking Guidelines or the compliance requirements contained in the framework.
Instead, the discussions have centred on the jurisdiction to issue such a framework, with the ministry expressing the view that measures carrying regulatory implications would ordinarily fall within the government's domain.
"The discussions are more about jurisdiction than about the contents of the guidelines. The issue being examined is who should issue such a framework," one person aware of the matter said.
Another person familiar with the discussions said there is also a view that, if ICAI were to issue such a document, it may be more appropriate for it to take the form of recommendations rather than guidelines that could be interpreted as having regulatory implications.
"The discussion is not about rewriting the framework. The focus is on the nature of the document and the authority under which it should be issued," the person added.
Rollout paused pending discussions
According to people aware of the development, ICAI has not taken any final decision on the future of the proposed Global Networking Guidelines but has paused their rollout while discussions with the ministry are underway.
The institute had framed the proposed guidelines after carrying out stakeholder consultations with accounting firms and other stakeholders. However, no further steps are expected until the ongoing discussions with MCA are concluded, the people said.
One person familiar with the matter said ICAI President CA. Prasanna Kumar D is likely to discuss the issue with senior ministry officials before any decision is taken on the proposed framework.
Statutory powers remain part of the discussions
The discussions come even as Section 15(2)(fa) of the Chartered Accountants Act, 1949, empowers the ICAI Council to make guidelines relating to the aggregation, merger and demerger of chartered accountant firms and limited liability partnerships, as well as to regulate professional assignments.
People familiar with the matter said the ongoing discussions are not centred on the existence of ICAI's statutory powers under the Act but on the scope of those powers where a framework may be viewed as having wider regulatory implications.
"The deliberations are focused on the institutional role and the character of the framework. Those discussions are still ongoing," another person aware of the matter said.
Background
The proposed Global Networking Guidelines were framed to establish a governance framework for networking arrangements involving chartered accountant firms, including firms associated with international accounting networks. ICAI also carried out stakeholder consultations before finalising the proposed framework.
The latest developments suggest that the discussions have moved beyond the contents of the proposed Global Networking Guidelines to the broader question of institutional jurisdiction over issuing frameworks that may carry regulatory implications.
Section 15(2)(fa) of the Chartered Accountants Act, 1949, empowers the ICAI Council to make guidelines regarding the aggregation, merger and demerger of chartered accountant firms and limited liability partnerships, as well as to regulate professional assignments. People familiar with the matter said the ongoing discussions are focused on how those statutory powers interface with frameworks that may be perceived as having wider regulatory implications.
Queries sent to MCA and ICAI did not receive a response till the time of publication.
[ET CFO]
