Rebuilding Regulatory Infrastructure: The New SRO Norms
Draft Framework for SROs for financial sector entities
– Srinithi Sreepathy, finserv@vinodkothari.com
On December 21, 2023, the Reserve Bank of India presented its first ‘Draft Omnibus Framework for recognising Self-Regulatory Organisations for Regulated Entities’(‘Omnibus’). The Framework comes in pursuance of its Statement on Developmental and Regulatory Policies dated October 06, 2023.
The Omnibus Framework is in response to a vacuum located between Regulators and the ever-evolving industry dynamic. The RBI has proposed a draft in the form of the present omnibus framework, for Self-Regulatory Organisations (SROs) indicating a willingness to enter a collaborative approach to regulatory frameworks.
The present Omnibus, taking the increasing number of regulated entities and their growing scale of business into consideration recognises the lack of sufficient industry standards for self-regulation. Identifying this need and being aware of the futility of increasing the burden on regulatory bodies like the RBI, SEBI or IRDA, (in this case, specifically: the RBI) the framework finds middle ground by recognising self-regulation amongst members of various industry entities.
Read more →