Sebi to come out with new norms for self regulatory org

Securities and Exchange Board of India is proposing to come out with new regulations to promote...

Securities and Exchange Board of India (Sebi) is proposing to come out with new regulations to promote self regulatory organisations (SROs) for financial sector players.

The regulator is considering various models of self regulation for intermediaries and would be promoting “SROs by way of creating new regulations and an enabling law,” said the annual report of the Sebi for 2006-07.

The regulator is in dialogue with various associations of intermediaries for their registration as SROs, the report said adding, organisations like Association of NSE Members of India (ANMI)and Depository Participants Association of India have shown interest in getting themselves registered as SROs.

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The other key agenda of the regulator will be to fine-tune the regulations to enable individuals and Indian mutual funds to invest in overseas securities. In addition, it would also focus on structuring guidelines to permit issuance of exchangeable bonds by Indian companies.

As regards SROs, the Sebi report said that ANMI and merchant bankers in their meetings with the regulator had emphasised the need to have SROs which could act as the first level of regulator and provide effective checks and balances for developing a sound and integrated stock market.

Stating that the job of a regulator is a challenging task, SEBI said, it could become, “relatively easy if other organisations start to function as self-regulated entities by framing their own laws and bye-laws to keep a first-level check on their registered members.” Establishment of SROs, the report added, would help Sebi to “act as second line of protection against frauds and manipulations”.