Mutual fund self regulators: Sebi invites applications

Sebi in January had amended its regulations to adopt the SRO model for MF distributors

The Securities and Exchange Board of India (Sebi) has invited applications from entities that would like to be recognised as self regulatory organisations (SRO) for mutual fund distributors.

An SRO is an association or group of entities, which has some authority to regulate an industry or persons practicing a profession.

“Applications are invited from any group or association of intermediaries which are desirous of being recognised as a self regulatory organisation for distributors of mutual fund products,” according to a Sebi circular on Thursday.

Sebi had amended its regulations to adopt the SRO model for mutual fund distributors in January.

V Ramesh, deputy chief executive at mutual fund industry body, the Association of Mutual Funds in India (Amfi) stated that Amfi had applied for such a role earlier. “If a fresh application is required, we will submit it,” he said.  

The requirements for an SRO include a minimum net worth of Rs 1 crore, according to the Sebi SRO regulations.

Ranjeet S Mudholkar, vice-chairman and chief executive officer, Financial Planning Standards Board India said the SRO would improve industry standards.

 “The cost of regulation goes down and governance standards improve. The regulation also becomes more focused,” he said.