Context:
Reserve Bank of India (RBI) finalised the Omnibus Framework for recognising Self-Regulatory Organisations (SROs) for Regulated Entities (REs)
Self Regulatory Organisations:
- Parameters recognised in the Omnibus framework for recognising SROs – Objectives, Responsibilities, Eligibility criteria, Governance standards etc.
- Objectives – Promoting compliance culture, support to smaller entities, act as collective voice of members, collect sectoral information, and encourage R&D culture.
- Eligibility –
- An SRO shall be setup as a not-for-profit company registered under Section 8 of the Companies Act, 2013.
- It should have adequate net worth and sufficiently diversified shareholding
- Responsibilities –
- It shall develop standards for improving compliance culture and surveillance methods for sector monitoring.
- Promote best business practices and disseminate sector specific information
- Promote dispute resolution and establish minimum conduct benchmarks
- Ensuring regulatory compliance, promote sector development, foster innovation and detect early warning signals.
- Governance framework –
- Articles of Association bye-laws shall provide for manner of functioning of Governing Body and specify the functions of SRO.
- Directors of the SRO need to fulfil the ‘fit and proper’ criteria as framed by the Board of the SRO
- At least 1/3rd of members in Board of Directors including Chairperson shall be independent.
- Any change in the directorship or any adverse information about any Director shall be immediately reported to the Reserve Bank.
- Compliance with relevant Acts, regulations, guidelines, directions or circulars issued by RBI
Source: The Hindu
Previous Year Question
What is/are the recent policy initiative(s) of Government of India to promote the growth of manufacturing sector?
1. Setting up of National Investment and Manufacturing Zones
2. Providing the benefit of ‘single window clearance
3. Establishing the Technology Acquisition and Development Fund
Select the correct answer using the code given below:
[UPSC Civil Service Exam – 2012 Prelims]
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (d)
