Explanation:

Only statement 1st is correct.

• The Reserve Bank of India recently issued a framework to recognise self-regulatory organisations in the financial markets.

About Self-Regulatory Organizations (SROs)

• An SRO, is generally a non-governmental entity created by members of a particular industry or sector to help govern the companies in that industry.

• An SRO sets and enforces rules and standards relating to the conduct of entities in the industry (members) to protect the customer and promote ethics, equality and professionalism.

• SROs typically collaborate with all stakeholders in framing rules and regulations.

• Their self-regulatory processes are administered through impartial mechanisms such that members operate in a disciplined environment and accept penal actions by the SRO.

• An SRO is expected to address concerns beyond the narrow self-interests of the industry, such as to protect workers, customers, or other participants in the ecosystem.

• Although SROs are private organizations, they are still subject to government-imposed regulation to a degree. However, the government does delegate some aspects of the industry oversight to SROs.

• Since the SRO has some regulatory influence over an industry or profession, it can often serve as a watchdog to guard against fraud or unprofessional practices.

• The ability of an SRO to exercise regulatory authority does not stem from a grant of power from the government.

• Instead, SROs often accomplish control through internal mechanisms that regulate the flow of business operations.

• The authority may also come from an external agreement between businesses.

• The purpose of these organizations is to govern from within while avoiding ties to a country's governance.

Hence option 1st is correct.