Starting the process for setting up a Self Regulatory Organisation (SRO) for the mutual funds (MF) distributors, capital markets regulator SEBI today invited applications from groups of intermediaries interested in forming such an oversight body.
The move follows notification of norms by the Securities and Exchange Board of India (SEBI) in January to set up an SRO for regulation of distributors of mutual fund and portfolio management products.
In a public notice issued today, the SEBI said it is inviting applications from “any group or association of intermediaries which are desirous of being recognised as an SRO...for distributors of mutual fund products”.
As per the norms, an applicant seeking SRO status from SEBI has to be a registered company under the Companies Act.
Among others, the applicant should have a minimum net-worth of Rs one crore and have adequate infrastructure to enable it to discharge its functions as a SRO.
Besides, the directors of the applicant entity would need to have professional competence, financial soundness and general reputation of fairness and integrity to the satisfaction of SEBI.
In addition, the applicants and their directors must not be involved in legal proceedings connected with the securities market or have any conviction for an economic offence.
According to the norms, the certificate of recognition as an SRO would be valid for a period of five years.