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).
- FRC is Mongolia’s (non-bank) financial markets regulator.
- FRC, like SEBI, is a co-signatory to International Organization of Securities Commissions’ Multilateral MoU (IOSCO MMoU).
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.
- 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.
- 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?
- 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.
- 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.