SEBI will soon start the process to appoint self-regulatory organisation (SRO) for mutual fund distributors. In fact, the market regulator has asked AMFI to start preparing for SRO, said three chief executives.
An AMFI board member requesting anonymity told Cafemutual that SEBI has asked AMFI to prepare for SRO. “The market regulator understands the need to appoint an SRO for distributors. Hence, they are keen to expedite the process of appointing an SRO.”
Earlier in August, SEBI Chief Ajay Tyagi said, “We are working on the process of appointment of SRO for distributors. We understand that distributors which today number in thousands, need SRO. We will come out with the policy on this soon.”
SRO for mutual fund distributors will be responsible for micro-regulations of its members. The SRO will spread awareness about mutual funds among people, educate and train distributors and conduct screening test for them.
Earlier, SEBI had invited applications for SRO in March 2013. In fact, the market regulator gave its go ahead to AMFI promoted Institution of Mutual Funds Intermediaries (IMFI) to form SRO in February 2014. However, SAT quashed SEBI’s decision to grant in-principle approval to IMFI after Financial Planning Supervisory Foundation (FPSF) intervention. Later the Supreme Court upheld SAT’s decision and asked the market regulator to start the selection procedure afresh in December 2017.
