NEW DELHI: The Reserve Bank of India (RBI) on December 21 announced draft omnibus norms for setting up self-regulatory organisations (SROs) by its regulated entities and in those it has proposed to audit the books of such institutions.
The framework prescribes the broad objectives, functions, eligibility criteria, and governance standards, which will be common for all SROs irrespective of sectors they belong to.
The framework lays down the broad membership criteria and other terms and conditions to be followed by SROs for grant of recognition by the regulator.
“Reserve Bank may inspect the books of the SRO or arrange to have the books inspected by an audit firm. The SRO shall be obligated to provide the required information to the inspection team for the purpose of conduct of inspection,” the draft norms said, adding the expenses of such inspection shall be borne by the SRO.
The draft norms maintained that the SROs should have strong governance mechanisms, including a focus on an independent board, transparency, and adherence to well-defined processes.
