Context:
RBI released a Draft Omnibus Framework for recognising Self-Regulatory Organisations (SROs) for its Regulated Entities (REs).
Self-Regulatory Organisations (SROs):
- A non-governmental organization
- Represents a particular sector/industry and sets and enforces rules and standards relating to conduct of its member entities. [E.g. Financial Industry Regulatory Authority]
- Eligibility criteria –
- As an SRO shall be set up as a not-for-profit company registered under Section 8 of Companies Act, 2013.
- Characteristics of SRO –
- SRO should have strong governance mechanisms, including focus on independent board, transparency, and adherence to well-defined processes.
- Develop standards for improving compliance culture and adherence by its members to rules and regulations framed by RBI.
- Devise and implement standardised procedures for handling disputes among members.
- Objectives of SRO –
- Promote a culture of compliance among its members by promoting progressive practices.
- Act as collective voice of members and address broader industry concerns.
- Collect and share relevant sectoral information to aid RBI in policymaking.
- Encourage a culture of research and development within sector.
Source: The Hindu
Previous Year Question
Consider the following statements:
Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is exempted from tax, but the dividend is taxable.
Statement-II: InviTs are recognized as borrowers under the ‘Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002’.
Which one of the following is correct in respect of the above statements?
[UPSC Civil Services Exam – 2023 Prelims]
(a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
(b) Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
(c) Statement-1 is correct but Statement-II is incorrect
(d) Statement-I is incorrect Statement-II is correct
Answer: (d)
