RBI Sets Rules for Self-Regulatory Bodies in Finance

20 Aug 2024 , 12:27 PM

A minimum ₹10 crore qualifying criterion was set by the Reserve Bank of India (RBI) when it issued the framework for the recognition of self-regulatory organizations in the financial markets on Monday.

In order to encourage ethical behavior, the regulator wants to expand the market by improving participation, facilitating access, and safeguarding users.

“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,” according to the RBI. “SROs can play vital role in this direction by proactively developing and ensuring adoption and adherence to industry standards and best practices by its members in financial markets.”

The SRO will serve as a liaison between the regulator and its members. It will guarantee improved adherence to legal requirements, provide early warning indicators, safeguard stakeholder interests, and promote innovation.

The regulator desires that SRO develop and put into effect a thorough code of conduct for its members in order to provide direction and assistance, especially to the smaller businesses in the industry, and to exchange best practices that are in line with legal and regulatory requirements.

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