The Securities and Appellate tribunal (SAT) gave a patient hearing to the two parties - Institution for Mutual Fund Intermediaries (IMFI) and Financial Planning Supervisory Foundation (FPSF) who are vying to become SRO for mutual fund distributors. After a long adjournment, the arguments have concluded on September 02.
The SAT is expected to come out with its judgment soon. Distributors are waiting keenly for the outcome of the judgment.
In March 2014, 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. In its appeal, FPSF had 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 had said at a CII Mutual Fund summit in June that the market regulator wants to see a strong SRO for regulating mutual fund distributors.
