RBI issues norms for recognition of self-regulatory organisations in financial markets #IndustryFinance

Mumbai: The Reserve Bank of India (RBI) Monday published the framework for recognition of self-regulatory organisations in financial markets, setting a minimum ₹10 crore eligibility threshold.

The regulator is looking to broad-base markets by easing access, enhancing participation and protecting users to promote fair conduct.

“With the growth of the Regulated Entities (REs), in terms of number as well as scale of operations, increase in adoption of innovative technologies and enhanced customer outreach, a need is felt to develop better industry standards for self-regulation,” the RBI said. “SROs can play a vital role in this direction by proactively developing and ensuring adoption and adherence to industry standards and best practices by its members in the financial markets.”

The SRO will act as a bridge between its members and the regulator. It will ensure better compliance with regulatory guidelines, development of early warning signals, protection of stakeholder interests, and foster innovation.

The regulator wants SRO to frame and implement a comprehensive code of conduct for its members to extend guidance and support, particularly to the smaller entities in the sector, and share best practices aligned with statutory and regulatory policies.