Plea against MF body as self-regulator admitted

The Securities Appellate Tribunal (SAT) has admitted an appeal against a decision on approval given for setting up a regulatory organisation for mutual fund (MF) distributors. SAT hears appeals against decisions of capital markets regulator Securities and Exchange Board of India (Sebi).

The appeal will be heard on July 1.

Sebi had given its approval on February 6 to the Institution for Mutual Fund Intermediaries (IMFI) to act as a self-regulatory organisation for distributors. IMFI is promoted by the Association of Mutual Funds in India.

Another applicant for the role, the Financial Planning Supervisory Foundation, had moved SAT against this citing a conflict of interest.

FPSF argued there was a conflict of interest in allowing an organisation promoted by the mutual fund sector to regulate distributors of their own products. It had argued IMFI had filed the SRO application on July 29, while it was only incorporated on August 2. Sebi's deadline for filing the SRO application was July 31.

IMFI, FPSF and Organization of Financial Distributors had filed applications to form an SRO.