The wait for the outcome of FPSB’s 18 months long tussle with SEBI on its decision to grant in-principle approval to AMFI promoted Institution for Mutual Fund Intermediaries (IMFI) just got longer. Securities Appellate Tribunal (SAT) has once again adjourned the hearing on SRO case to September 2.
In March 2014, Financial Planning Supervisory Foundation (FPSF) had filed the appeal with SAT. In its first hearing on April 23, SAT had directed SEBI not to grant a final approval to IMFI to set up SRO.
Financial Planning Supervisory Foundation (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 stated 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 Institution for Mutual Fund Intermediaries (IMFI). IMFI received an in-principle approval to set up SRO on February 6, 2014.
SEBI, in its reply to Securities Appellate Tribunal (SAT), had said that it gave equal and fair opportunity to all the three applicants before taking a final decision. The third contender was Organization of Financial Distributors (OFD) promoted by Financial Intermediaries Association of India (FIAI), an association of large distributors.
SEBI Chairman UK Sinha has said that the market regulator wants to see a strong SRO for regulating mutual fund distributors. He was speaking at a recently held CII Mutual Fund summit in Mumbai.
