1.Objective
1.1.The objective of the Consultation Paper is to seek comments from the public onthe proposal to amend the Securities and Exchange Board of India (Self RegulatoryOrganizations)Regulations, 2004 (SRO Regulations) for the purposes of defining Self Regulatory Organization, simplifying the process of recognition and strengthening the role of Self Regulatory Organizations (SROs) in the securities market.
2.Background
2.1.SEBI had notified the SRO Regulations on February 19, 2004. As on date, the said Regulations arein forceonlyin relation to distributors engaged by Asset Management Companies of Mutual Funds and distributors engaged by Portfolio Managers.
2.2.SEBI had initiated the process of selection of SRO for distributors of Mutual Fund (MF) products in 2013. Thein-principle approval granted to one of the applicants was challenged before the Hon’ble Securities Appellate Tribunal (SAT) and a further appeal was made before the Hon’ble Supreme Court.
2.3. In October 2017, pursuant to an application filed by SEBI, the Hon’ble Supreme Court allowed SEBI to start afresh the selection process for SRO of distributors of MF products
2.4. Pursuant to the same and after a detailed internal deliberation in the matter, SEBI had filed an application before the Hon’ble Supreme Court to seek leave to make necessary amendments to the SRO Regulations including that of recognizing a company as an SRO, after considering its experience and capability, without calling for applications.
2.5.The Hon’ble Supreme Court in its order dated November 12, 2018 while allowing SEBI’s application observed the following:
“Prayer to amend the Self Regulatory Organization (SRO) Regulations and to consider the pending cases in the light of the amended Regulations is allowed. We make it clear that we have expressed no opinion on the validity of the amendment(s) proposed.”
To know more in details, find the enclosed attachment
CAclubindia
