India News | Sebi Open to Offering Segmental Regulations: Buch
Get latest articles and stories on India at LatestLY. The capital markets watchdog is not seeking a one-size-fits-all approach when it comes to regulations and is open to draft segmental norms, especially for industries with many sub-segments, Sebi Chairperson Madhabi Puri Buch said here on Wednesday.
Mumbai, Oct 4 (PTI) The capital markets watchdog is not seeking a one-size-fits-all approach when it comes to regulations and is open to draft segmental norms, especially for industries with many sub-segments, Sebi Chairperson Madhabi Puri Buch said here on Wednesday.
Addressing the Association of Registered Investment Advisers (ARIA), Buch said Sebi believes in co-creation of regulations and asked its members to help the watchdog plug loopholes.
"Your structure is such that you believe more in circumventing the regulations than following them. In fact, you are vastly off the regulatory path," she said.
"We agree that there should not be a one-size-fits-all approach and we're open for segmented regulations for areas within the broader investment advisory platform. But this does not mean you expect us to draft separate norms for each niche segment within these subsegments," Buch said.
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We need your help to take the regulations to the ground, and being the industry body your ears are closer to the ground than ours, Buch said.
You take pride in saying that you don't take fees other than those allowed by the Sebi regulations, but at the same time you admit that your commissions and other payments go to your spouses' accounts, she said, urging them to stop indulging in "shanapanti" (colloquial Hindi word for being oversmart).
Blasting the association for lack of disclosures when it comes to fees and other incentives, she said at least 35 per cent of the 1,300-odd ARIA members do not follow basic disclosure norms.
Buch urged the association to be proactive in addressing the "wide level of malpractices".
"I want a million good investment advisors... Why not foster an ecosystem where good advisors make more money than the bad ones? Please help us help the good guys win and stop the bad guys from continuing their malpractices," she said.
Coming down heavily on unregistered investment advisors, the Sebi chairperson dared them to advise their own mothers-in-law to park their money in the stock/product that they endorse illegally.
On the recent interest in the EV-5 visas -- which allows an investment of USD 0.5 million or more and one can get easy residency visas in many western countries -- Buch said this is the riskiest form of investment that she knows of as the chance of getting the principal is almost nil as these have a long-term tenor running into 5-7 years.
This is a product regulated by nobody today, she said.
The ARIA was formed in January 2019 to support the development of the investment advisors' community.
As per available information, as of March 2023 there were about 1,300 Sebi-registered investment advisors and of them only 64 per cent (828) have individual Sebi licence. The association's official website does not disclose the number of its members.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)