MoU Between SEBI and FRC Mongolia

• 11 Apr 2022

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.
• 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 12^th 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