SRO: what are self-regulating organizations?

SRO (self-regulatory organization) is a voluntary non-profit association of legal entities with the aim of regulating the range of issues related to a particular industry or profession. It can deal with issues, the order of which is not regulated by law, and also supplement government regulation. The SRO's ability to exercise regulatory functions often results from the powers 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 an authority that controls the quality of their work. Responsibility of producers to consumers is the main postulate of SRO activity. What are the standards of product quality, and why they must be respected, understand not all market participants. Therefore, self-regulating organizations often establish their own rules for standardization and product certification aimed at increasing the competitiveness of all players in their industry.

Historical reference

In the US, there are many SROs. What is a self-regulatory organization in the American way, and how it works, can be explained with a concrete example. The main US federal regulatory body, the Securities and Exchange Commission (SEC), has decided to delegate some of its authority to change the industry standards of the NASDA and US stock exchanges . After they enforced requirements related to changing the order of dealing with securities and brokerage services, NASD and NYSE - through merger - were transformed into a new SRO. FINRA today carries out broader regulatory functions in the financial sector.

Self-regulating organizations in Russia

The history of Russian organizations begins in 1995, when the first law on SRO was adopted. What is self-regulating organizations, what tasks they have to solve, in those transitional conditions was unclear. The introduction of the institute of self-regulation was supposed to streamline the activities of housing cooperatives, investment and pension funds, arbitration managers, and also regulate the work on the securities market.

Today, there are more than 1 thousand SROs operating in 26 professional sectors in Russia. The construction and energy industries are leaders in their number. There are 445 self-regulating organizations of builders and designers in the country. SROs in the field of energy audit are represented by 133 organizations.

Self-regulating construction organizations

Self-regulation in construction has been counting since 2009, in which the state licensing of the construction business was abolished. Legislatively, it was prescribed the creation of SRO builders in the field of:

• preparation of design estimates;

• engineering surveys;

• Construction.

Builders appreciated the innovation and began to massively register their membership in the SRO. What is the association of builders will help the industry to quickly recover from the crisis, it was clear right away. Indeed, within 2 years the volume of construction has returned to the pre-crisis level, and the creation by the SRO of the tender area of the ESTP for builders has solved the problem of timely distribution of orders.