SEBI is likely to issue consultation paper on self regulatory organisation (SRO) in securities market soon.
In the SEBI board meeting held today, the market regulator has decided to float a consultation process to amend SEBI SRO Regulations, 2004 that also talks about SRO for financial intermediaries such as mutual fund distributors.
The objective of consultation paper is to define the objective of SRO, rationalising the process of recognition and strengthening the role of SRO in the securities market.
The current SEBI guidelines on SRO for mutual fund distributors say that the SRO should conduct training programmes for its members and conduct awareness programmes for securities market investors. Also, such an SRO should conduct screening and certification tests for its members (distributors). SRO should decide qualifications for membership, the exclusion, suspension, expulsion and readmission of members, said the regulations.
Simply put, SRO for mutual fund distributors is 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.
