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MoU Between SEBI and FRC Mongolia

  • 11 Apr 2022
  • 4 min read

Why in News?

Recently, the Union Cabinet has approved the proposal for a bilateral Memorandum of Understanding (MoU) between Securities and Exchange Board of India (SEBI) and Financial Regulatory Commission, Mongolia (FRC).

What is the MoU about?

  • The proposed bilateral MoU would, in addition to contributing towards strengthening the information sharing framework leading to effective enforcement of securities laws, also help in establishing a technical assistance programme.
    • The IOSCO MMoU does not have under its scope the provision for technical assistance.
  • The technical assistance programme would benefit the Authorities by way of consultations on matters relating to capital markets, capacity building activities and training programmes for the staff.

What is IOSCO?

  • Founded: April 1983
  • Headquarters: Madrid, Spain
    • IOSCO Asia Pacific Hub is located in Kuala Lumpur, Malaysia.
  • About:
    • It is the international organization that brings together the world's securities regulators, covering more than 95% of the world’s securities markets, and is the global standard setter for the securities sector.
    • It works closely with the G20 (Group of Twenty) and the Financial Stability Board (FSB) in setting up the standards for strengthening the securities markets.
  • Objectives:
    • The IOSCO Objectives and Principles of Securities Regulation have been endorsed by FSB as one of the key standards for sound financial systems.
    • IOSCO's enforcement role extends to matters of interpretation of International Financial Reporting Standards (IFRS), where IOSCO maintains a (confidential) database of enforcement actions taken by member agencies.
      • IFRS is an accounting standard that has been issued by the International Accounting Standards Board (IASB) with the objective of providing a common accounting language to increase transparency in the presentation of financial information.

What is SEBI?

  • About:
    • SEBI is a Statutory Body (a Non-Constitutional body which is set up by a Parliament) established on 12th April, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
    • The basic functions of SEBI is to protect the interests of investors in securities and to promote and regulate the securities market.
    • The headquarters of SEBI is situated in Mumbai. The regional offices of SEBI are located in Ahmedabad, Kolkata, Chennai and Delhi.
  • Background:
    • Before SEBI came into existence, Controller of Capital Issues was the regulatory authority, it derived authority from the Capital Issues (Control) Act, 1947.
    • Initially SEBI was a non statutory body without any statutory power.
    • It became autonomous and given statutory powers by SEBI Act 1992.

Source: PIB

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