India’s Union Cabinet has recently given the green light for a bilateral Memorandum of Understanding (MoU) between the Securities and Exchange Board of India (SEBI) and Mongolia’s Financial Regulatory Commission (FRC). The FRC, like SEBI, is a member of the International Organization of Securities Commissions. This agreement aims to strengthen information sharing and introduce a technical support scheme.
Mongolia and India Ink New Agreement
The Union Cabinet’s recent approval of a bilateral MoU between the SEBI and FRC marks a significant step in fostering intercontinental financial cooperation. The FRC, being Mongolia’s principal non-banking financial market regulator, shares many similarities with India’s own SEBI, including membership in the International Organization of Securities Commissions’ Multilateral MoU (IOSCO MMoU).
Purpose and Scope of the MoU
This agreement is expected to bolster the robustness of the information sharing framework between the two nations, thereby enabling more effective enforcement of securities laws. Furthermore, it paves the way for a joint technical support scheme, an aspect not covered by the IOSCO MMoU. This programme will facilitate knowledge exchange through consultations on capital markets-related topics, staff training sessions, and capacity-building activities.
Understanding IOSCO
Founded in April 1983, with its headquarters in Madrid, Spain, and an Asia Pacific hub in Kuala Lumpur, Malaysia, the IOSCO serves as a central body that unites world’s securities regulators. It covers more than 95% of global securities markets and holds the mantle as the international standard-setter for this sector. The Financial Stability Board (FSB) and the Group of Twenty (G20) work alongside the IOSCO in creating norms to fortify these markets. One of the key initiatives of IOSCO is the enforcement of the International Financial Reporting Standards (IFRS), a shared accounting language developed by the International Accounting Standards Board (IASB) to enhance the transparency of financial data presentation.
SEBI at a Glance
Established on April 12, 1992, under the provisions of the Securities and Exchange Board of India Act, SEBI is a non-constitutional, statutory body tasked with safeguarding investors’ interests in securities and fostering and regulating the nation’s securities market. It operates out of its headquarters based in Mumbai, with regional offices spread across Ahmedabad, Kolkata, Chennai, and Delhi. Before its inception, the regulatory authority was the Controller of Capital Issues, drawing its power from the Capital Issues (Control) Act of 1947. Originally a non-statutory body, SEBI secured autonomy and statutory powers through the SEBI Act of 1992.