RBI Tightens Grip on Financial Markets with New ₹10 Crore SRO Recognition Norms: Industry Standards & Innovation in Focus

The Reserve Bank of India (RBI) has introduced a new framework for recognising self-regulatory organisations (SROs) in the financial markets. These guidelines, released on Monday, set a minimum eligibility threshold of ₹10 crore.

Objective: Broader Market Access

The RBI aims to expand market accessibility, increase participation, and ensure user protection through this framework. The goal is to promote fair conduct in financial markets.

Need for Self-Regulation

With the growth of regulated entities (REs) in terms of both numbers and scale, the adoption of innovative technologies, and expanded customer reach, the RBI sees a need for better industry standards. SROs are expected to help by setting and enforcing industry standards and best practices among their members.

Role of SROs

SROs will serve as a link between their members and the regulator. They will be responsible for ensuring compliance with regulatory guidelines, identifying early warning signals, protecting stakeholder interests, and encouraging innovation.

Support for Smaller Entities

The RBI wants SROs to create and enforce a comprehensive code of conduct for their members. This will include providing guidance and support, especially to smaller entities, and sharing best practices that align with legal and regulatory requirements.