SEBI decision is awaited keenly
SEBI is said to have received applications for forming mutual fund distributors’ Self Regulatory Organization (SRO) from AMFI, Financial Planning Standards Board India (FPSB) and Financial Intermediaries Association of India (FIAI).
While the SEBI decision on which of these entities will eventually is awaited keenly, it is understood that SEBI will take more time. The deadline for submitting applications for SRO was July 31.
Interestingly, the three entities are very different – while AMFI is the trade body of mutual fund manufacturers (albeit with the responsibility of distributor registrations), FIAI is an association of 15 large distributors and FPSB provides CFP certification.
“FPSB India has applied to SEBI under SEBI SRO Regulations, 2004. We have established the best board on FPSB. We trust the wisdom of SEBI. It doesn’t matter who gets SRO status. It should be in the larger interest of investors,” said Ranjeet Mudholkar, Vice Chairman & CEO, FPSB India. A non-for-profit association, FPSB provides CFP certification. Representatives from media, financial advisors, regulators and AMC CEOs are its board of directors. Also, it has 48 charter members who represent insurance firms, AMCs, banks and national distributors.
In the meanwhile, AMFI had begun its search for the SRO CEO in April 2013 when it issued an advertisement inviting applications.
SEBI’s board had approved the proposal to set up SRO in its meeting held on August 16, 2012. The regulator has said that there will be a single SRO for MF distributors. The SRO must be a company registered under section 25 of the Companies Act, 1956, and must have a minimum net worth of Rs 1 crore.
SEBI will initially grant an in-principle approval for setting up an SRO. According to SEBI, the applicant will be given a reasonable time period for complying with all requirements (to meet the minimum requirement of Rs 1 crore, setting up of infrastructure for SRO, etc.) for getting the recognition of SRO.
