2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
SRO (self-regulatory organization) is a voluntary non-profit association of legal entities with the aim of regulating a range of issues related to a particular industry or profession. It can deal with issues, the procedure for resolving which is not fixed by law, as well as supplement state regulation. The ability of an SRO to exercise regulatory functions often stems from the authority given to it by the government.
The main goal for which SROs are created is to minimize state participation in the professional activities of organizations and at the same time create a body that controls the quality of their work. The responsibility of producers to consumers is the main postulate of SRO activities. Not all market participants understand what product quality standards are and why they must be observed. Therefore, self-regulatory organizations often establish their own rules for standardization and certification of products, aimed atincreasing the competitiveness of all players in their industry.
Historical background
There are many SROs in the US. What is an American-style self-regulatory organization, and how exactly it works, can be explained with a specific example. The main US federal regulatory body - the Securities and Exchange Commission (SEC) - decided to delegate part of its authority to change industry standards to the Association of Securities Dealers (NASD) and the American Stock Exchanges (NYSE). After they enforced the requirements related to the change in the procedure for dealing with securities and the rules for the provision of brokerage services, the NASD and NYSE - through a merger - were transformed into a new SRO. FINRA is now implementing broader regulatory functions in the financial sector.
Self-Regulatory Organizations in Russia
The history of Russian organizations begins in 1995, when the first law on SROs was adopted. What are self-regulatory organizations, what tasks they have to solve, in those transitional conditions it was not clear. The introduction of the institution of self-regulation was supposed to streamline the activities of housing cooperatives, investment and pension funds, arbitration managers, as well as regulate the work on the securities market.
Today there are more than 1,000 SROs in the Russian Federation operating in 26 professional industries. The construction and energy industries are leaders in terms of their number. There are 445 self-regulatory organizations of builders and designers operating in the country. SRO in the fieldenergy audit is represented by 133 organizations.
Self-Regulatory Building Organizations
Self-regulation in construction dates back to 2009, when the institution of state licensing of the construction business was abolished. It was legally prescribed the creation of SRO builders in the field:
• preparation of design estimates;
• engineering surveys;
• construction.
Builders appreciated the innovation and began en masse to formalize their membership in the SRO. It was immediately clear that such an association of builders would help the industry quickly recover from the crisis. Indeed, within 2 years, the volume of construction returned to the pre-crisis level, and the creation by the SRO of the ECTP tender platform for builders solved the problem of timely distribution of orders.
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