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Feedback to RBI on the draft Omnibus Framework for recognising Self-Regulatory Organisations for Regulated Entities
Feedback to RBI on the draft Omnibus Framework for recognising Self-Regulatory Organisations for Regulated Entities

February 29, 2024

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On February 1, 2024, we submitted feedback to the Reserve Bank of India (RBI) on the draft Omnibus Framework for recognising Self-Regulatory Organisations (SROs) for Regulated Entities.

We suggested that:

  1. Functions to be undertaken by SRO: An SRO should be created to fill the gaps and strengthen the ecosystem, rather than creating conflicting roles leading to unnecessary overlap with existing entities such as the regulator itself or an industry association. Accordingly, pure regulatory functions such as setting and enforcing standards and rules should not be assigned to the SRO, rather these should continue to vest with the regulator. An SRO should assist the RBI by providing technical knowledge about the sector, running innovation sandboxes to showcase prototypes of solutions beneficial for the sector and drafting standards for consideration of the regulator. An SRO’s ability to discharge these functions effectively is relatively strong and it might be useful for the regulator to task these functions to the SRO subject to an appropriate oversight mechanism.
  1. Establishing a Section-8 company should be mandated post in-principal approval - In the interest of easing the process for applying for ab SRO and to encourage new entities (that may not already exist) to apply for an SRO, we recommend that the formation of a Section-8 company should be required only after getting the in-principal approval from RBI.
  1. The membership criteria should be unambiguous - RBI should give an objective criterion to clarify as to what is expected from an SRO in terms of being truly representative of the sector. The eligibility criterion for becoming a member and continuing membership should be clearly established in the framework.

The detailed feedback is attached for your reference. For more information, kindly write to garima@nasscom.in.

 


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240201-SROFramework-Nasscomfeedback.pdf

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Garima Prakash
Deputy Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech

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