The Financial Planning Supervisory Foundation (FPSF) has moved the Securities Appellate Tribunal against SEBI’s in-principle approval to the Institution for Mutual Fund Intermediaries (IMFI) for becoming a self-regulatory organisation for mutual fund distributors.

The regulator had cleared IMFI’s application vide a communication dated February 6, 2014.

FPSF has petitioned SAT that the date of incorporation of IMFI according to the records of the Ministry of Corporate Affairs was August 2, 2013, while the application to SEBI for becoming an SRO was on July 29, 2013.

SEBI had called for applications for an SRO for mutual fund distributors until July 31, 2013.

‘Ineligible applicant’ FPSF said as IMFI was not a legal person (entity) at the time of its application, the act was in violation of SEBI’s regulations for SROs.

FPSF contended that IMFI was an ineligible applicant according to regulations. Further, FPSF said it had to approach SAT as it did not receive any response from SEBI to its letter dated February 10, 2013, and two more letters to the Finance Ministry on February 10 and March 14.

Responding to Business Line’s queries, a communication from the regulator said, “SEBI has received a representation from Financial Planning Standard Board of India (FPSB) in the matter of granting in-principle approval in respect of application of IMFI for recognition as an SRO for mutual fund distributors. In light of the representation, SEBI is verifying facts. After following due process, the whole matter may be revisited, if so required.”

IMFI, promoted by the Association of Mutual Funds in India along with the Organisation of Financial Distributors, was one of the three applicants for becoming an SRO for mutual fund distributors.

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