The Securities Appellate Tribunal today adjourned till next month the hearing on Financial Planning Supervisory Foundation's plea against in-principle approval given by Sebi to IMFI for a self-regulatory organisation for mutual fund distributors.
Financial Planning Supervisory Foundation, promoted by Financial Planning Standards Board India (FPSB), was one of the applicants for setting up this SRO, but it was IMFI which got the go-ahead earlier in February.
IMFI has been promoted by mutual fund industry body AMFI (Association of Mutual Funds in India).
Aggrieved by the market regulator's decision FPSF had approached the tribunal. In its appeal, FPSF has made Sebi and IMFI as respondents.
AMFI, the parent of IMFI, is a grouping of all fund houses in the country and it is also entrusted with the responsibility of distributor registrations.
The SRO will assist Sebi and AMFI in regulating fund distributors and ensuring a cordial relationship with mutual fund houses.
The decision to set up an SRO followed concerns about MF distributors not being regulated and rising complaints against them for mis-selling products.
Besides IMFI and FPSF, the third applicant for this SRO role was Organisation of Financial Distributors, which was set up by Financial Intermediaries Association of India (FIAI), a grouping of 15 large distributors.
Presently, distributors need to register with AMFI, which can cancel the registration for violation of a prescribed code of conduct or for any other mala-fide practice.
