Securities Appellate Tribunal (SAT) has asked SEBI to send its reply justifying its decision to give AMFI promoted IMFI an in-principle approval to set up SRO by June.
In its hearing today in Mumbai, Securities Appellate Tribunal (SAT) has directed SEBI not to grant a final approval to AMFI promoted Institution for Mutual Fund Intermediaries (IMFI) to set up SRO.
IMFI received an in-principle approval to set up SRO on February 6, 2014.
SAT has also asked SEBI to send its reply justifying its decision to give in-principle approval to AMFI promoted IMFI as SRO by June.
Financial Planning Supervisory Foundation, one of the contenders for self-regulatory organization (SRO) of distributors had appealed against SEBI’s order of granting in-principle approval to IMFI with (SAT). FPSF had filed the appeal with SAT on March 27.
“It said that any further action can be taken subject to final order of SAT. In the meantime, SEBI can’t give final approval to IMFI as SRO,” said Sandeep Parekh of Finsec Law Advisors, the legal counsel for Financial Planning Supervisory Foundation (FPSF).
The next hearing is scheduled on July 01.
FPSF in its appeal has argued that the decision making process adopted by SEBI in granting in-principle approval to IMFI was not fair and just. It states that neither did SEBI conduct any formal interview to determine the most suitable applicant for SRO nor did it offer any substantive reasoning regarding its decision to grant in-principle approval to act as SRO to IMFI.
The third contender was Organization of Financial Distributors (OFD) promoted by Financial Intermediaries Association of India (FIAI), an association of national distributors.
