Supreme Court has allowed SEBI to start afresh the appointment on self regulatory organisation (SRO) of mutual fund distributors.
In the last hearing on October 13, the apex court has said, “It has been stated that the selection process had started in March, 2013 and with the passage of time many more persons/entities have become eligible and the respondent. No.1-SEBI, who had initiated the selection process, is confident that if it is permitted to start the process afresh more applications will be received, thereby broadening the choice of selection.”
“Having regard to the above statement of the application and the public interest involved, we allow prayer (a) as made in the application extracted above,” said the court.
SRO or self regulatory organisation for mutual fund distributors is expected to be responsible for micro-regulations of its members (MF distributors and spread awareness about mutual funds among people, educate and train distributors and conduct screening test for them.
In March 2014, Financial Planning Supervisory Foundation (FPSF) had filed the appeal with Securities Appellate Tribunal (SAT) against SEBI for its decision to grant permission to AMFI to launch a SRO for mutual fund distributors. After many hearings, SAT had quashed SEBI’s decision to grant in-principle approval to IMFI to act as an SRO for the mutual fund distributors. SAT has asked the market regulator to start the selection procedure afresh in September 2015.