The Securities and Exchange Board of India (Sebi) had earlier invited applications for setting up a self-regulatory organisation (SRO) for mutual fund distributors.
It subsequently announced that one of the applicants, the Institute of Mutual Funds Intermediaries (Imfi), had received approval to be an SRO. The Association of Mutual Funds of India (Amfi) set up Imfi. Amfi is an industry association for mutual fund houses.
Another applicant was the Organisation of Financial Distributors, which was promoted by Financial Intermediaries Association of India. The Financial Standards Planning Board, a financial planning body, had also applied. It had set up the Financial Planning Supervisory Foundation (FPSF) to act as regulator.
The latter objected to the Sebi decision on the grounds that IMFI had not been set up in time for the application deadline.
“The regulation expressly says such companies may make an application to the board…admittedly the respondent was not a section 25 company (at the time),” said Darius Khambatta, senior advocate who appeared on behalf of the FPSF on Tuesday.
Senior Advocate Shiraz Rustomjee appeared on behalf of Sebi. He said the deadline was not a statutory date, and had only been put in place to “speed things up", as no applications had been forthcoming after Sebi had initially asked for it.
The appellant’s counsel concluded his arguments on Tuesday.