Current Affairs

Cabinet approves signing of MoU between SEBI and FRC Mongolia

Bilateral MoU between SEBI and FRC, Mongolia

Cabinet approves signing of Bilateral Memorandum of Understanding (MoU) between SEBI and FRC Mongolia: The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the proposal to sign a bilateral Memorandum of Understanding (MoU) between the Securities and Exchange Board of India (SEBI) and the Financial Regulatory Commission (FRC), Mongolia.

Significant influence:

FRC, like SEBI, is a signatory to the International Organization of Securities Commissions Multilateral Memorandum of Understanding (IOSCO MMoU). The IOSCO MMoU, on the other hand, does not include a provision for technical support. The proposed bilateral MoU would, in addition to boosting the information-sharing mechanism that leads to efficient enforcement of securities laws, aid in the establishment of a technical assistance programme. The technical support programme would help the authorities through discussions on capital market issues, capacity development efforts, and staff training programmes.

Brief history:

The Securities and Exchange Board of India (SEBI) was founded in 1992 by the Securities and Exchange Board of India Act to govern India’s securities markets. The SEBI’s goals are to safeguard investors’ interests while also regulating and promoting the growth of India’s securities markets. Clause (ib) of Section 11 of the SEBI Act, 2002 empowers SEBI to request information from, or provide information to, other authorities, whether in India or outside India, with functions similar to those of the Board in matters relating to the prevention or detection of violations of securities laws, subject to the provisions of other laws. SEBI may enter into an arrangement, agreement, or understanding with any authority outside India for the purpose of providing information to such body, with the prior consent of the Central Government. In this backdrop, the FRC has asked SEBI to sign a bilateral Memorandum of Understanding (MOU) for mutual collaboration and technical support. Until now, SEBI has signed 27 bilateral Memorandums of Understanding (MOUs) with capital market regulators of other countries.

The Financial Regulatory Commission (FRC), established in 2006, is a legislative institution tasked with supervising and regulating the non-bank sector, which includes the insurance and securities markets, as well as microfinance participants. The FRC is in charge of ensuring stable and healthy financial markets. Non-bank financial institutions, insurance companies and intermediaries, securities firms, and savings and credit cooperatives are also subject to the Commission’s jurisdiction. At the same time, it protects individual financial market clients’ rights (securities holders, local and international investors, and insurance policyholders) from financial misconduct.

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Source: PIB