The Framework acknowledges that as Regulated Entities  grow in number and size, there's a lack of adequate industry standards for self-regulation.

• To address this, instead of increasing the burden on regulators like RBI and SEBI, the framework promotes  self-regulation among industry members.
• SROs can develop, promote, and enforce industry standards and best practices, enhancing self-regulation in financial markets.

About Self-Regulatory Organisations (SROs) framework

• Eligibility: 
  • Set up as a not-for-profit company registered under Section 8 of the Companies Act, 2013.
  • The applicant must have a minimum net- worth of INR 10 crore.
• Responsibilities: Inform the RBI about the developments in the sector on a regular basis; Carry out any work assigned to it by RBI, Submit an Annual Report to the RBI, etc.

About Regulated Entities (REs)

• REs refer to financial institutions and organizations that operate within the framework of specific regulations set by regulatory authorities.
• Role of REs: Maintaining Financial Stability; ensure compliance with regulations, conduct due diligence, and implement measures to prevent financial crimes, such as money laundering and fraud.
• Examples: Insurance Repositories under Insurance Regulatory and Development Authority (IRDA), Scheduled commercial banks under RBI, etc.