The Security and Exchange Board of India (SEBI) has released the Industry Standards Recognition Manual to guide the formation and functioning of Industry Standards Fora, which helps implement regulatory instructions.
The pilot programme for Industry Standards Fora (ISFs) was launched in July 2023, to develop implementation standards for regulatory guidelines. The launch was initially launched for listed companies and stockbrokers.
The scheme was enlarged after receiving feedback from the market participants, with the program later extended to other stakeholders, including portfolio managers, custodians, designated depository participants, and alternative investment funds, Sebi said in a release.
The ISFs were found to be facilitators of good governance and ease of compliance with high-quality compliance with regulatory directives.
“SEBI’s fresh circular on Industry standards Manual will have a positive impact on the implementation of regulations and ease of compliance and indicates a proactive approach of the regulator to make the operations of the securities market more robust and sustainable,” said Jyoti Prakash Gadia, Managing Director at Resurgent India
With no norms in respect of their formation and functioning as each forum worked with the flexibility of identifying mechanisms it found most efficient in its functioning. This has led to different modes of constitution and functioning.
The challenge also persisted with the Regulations/Circulars that should be taken up for formulation of implementation standards, the stage at which SEBI is to be consulted, the manner in which industry views are to be gathered, etc.
“The various regulated entities like market infrastructure institutions including stock exchanges listed entities etc can establish Industry Standards forums by way of committees and prepare standards of operating procedures based on specifics involved in each type and category of regulated entities,” he added.
The direction designates a member as its ‘point of contact’ who shall be responsible for the interactions of the ISF with SEBI to facilitate timely and seamless interaction and discussions with SEBI. “The proposed manual has clearly laid down rules for a well defined structure of the forums with a provision of appointment of sherpas/point of contact to ensure regular and fruitful intersection through the nodal officer,” he highlighted.
