The Reserve Bank of India ( RBI ) introduced a framework on Monday for recognizing self-regulatory organisations ( SROs ) within the financial markets, aiming to enhance compliance and foster a collaborative environment for policy development.
The RBI emphasised that these SROs would play a crucial role in establishing industry standards and best practices, ensuring their members adhere to these guidelines.
The RBI clarified that self-regulation is intended to complement, not replace, India’s existing legislative and regulatory structures. As part of their role, SROs will develop and promote best practices, standards, and codes within the regulatory framework established by the RBI. These guidelines will be voluntary for members but will set a high standard for industry conduct.
To fulfil their mission, SROs will need to meet specific objectives that advance the sector they represent and address significant industry issues. They will establish minimum benchmarks for professional market behaviour and work closely with the RBI to enhance compliance with regulatory guidelines. This collaboration will also involve the early detection of potential risks within the industry.
Furthermore, the RBI outlined that the recognition of an SRO comes with significant responsibilities. Should an SRO fail to act in the public interest or engage in activities contrary to its objectives, the RBI reserves the right to revoke its recognition.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
