Regulations
Investors Protection Group requests HC for investigation of NSE affairs by SEBI

The Group has alleged that NSE issued certain circulars in contravention to the rules and guidelines of the SEBI and thus favoured brokers over investors

Delhi-based Investor Protection Group (IPG) has filed a writ petition in the Delhi High Court (HC) against the National Stock Exchange (NSE), requesting to give directions to the Securities and Exchange Board of India (SEBI), to conduct an in-depth investigation into the alleged illegalities committed by the NSE. The petition is scheduled to be heard on 16th November.

In a release, IPG said, “We have asked court to direct SEBI to conduct a thorough investigation into the illegalities committed by the NSE and investigate if the acts of NSE are biased and are responsible for plotting loopholes in the system and to initiate appropriate legal action including cancellation or suspension of the registration/ licenses of NSE, if the same is established.”

According to the IPG, the Exchange deliberately issued certain circulars, in contravention to the rules and guidelines issued by SEBI, favouring the brokers and not to the investors. The group has also prayed to declare “those clauses of the circulars as null and void.”

Explaining the dubious role of NSE, the Group alleged that, “NSE acts as an informer to the brokers whereby they retrieve the critical information/ complaint from client and provides the information to the broker, but do not provide the complete documents /information to the client from brokers.”

It adds that, “Clients are made to fight their cases with incomplete information and as a result loose their case. NSE also does not support or provide any information about your account till they are forced by the Arbitrators.”

It has also alleged that illegal and unauthorized trading is carried out by the stock brokers under shelter of NSE. SEBI is also been named in the writ petition, because according to the group, such illegal trading are not monitored by the SEBI, as its responsibility as a stock market regulator.

The Delhi-based group has also alleged NSE for allowing brokers to make agreements/ contracts on their own without the mandatory signature of the clients required at the time of registration.  The writ petition has been referred to a division Bench of Delhi HC in the category of Public Interest Litigation (PIL).

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COMMENTS

sanjay

3 years ago

what happened Mr manoj . Pls. contact me on 9312264276 for any help in this matter . I can surely help and guide you to the best of my ability .

manoj somawanshi

3 years ago

am a victim of unauthorised trade .Request your support and guidance on the same.Please call me at 9881713693 /8600195553.

sanjay

3 years ago

what ahppened to this PIL ?

tonyraj

4 years ago

SEBI is an eyewash
NSE in my case appears to be hand in glove with my broker Motilal Oswal in denying justice after the white collared fraud perpetrated by Motilal Oswal

TonyRaj

krishnan

5 years ago

most of the stock brokers are not adhering to the rules and regulation of SEBI formed for the protection of small investors . small investors are being cheated by stock brokers and they are not getting justice from higher authorities mainly because they are not able to fight individually against the fraudulent and illegal activities of big stock brokers. investor protection group would really be relief for such small investors to raise their voice in appropriate forums.

pramod kumar

5 years ago

NEWS IN ECONOMIC TIMES TODAY

NEW DELHI: Stock market watchdog Securities and Exchange Board of India (SEBI) was today asked by the Delhi High Court to examine an investor group's allegation that National Stock Exchange was acting against investors to protect stock brokers's interests.

"The issue raised by the petitioner needs serious consideration by SEBI," said a bench of Acting Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw, disposing a petition by Investors Protection Group (IPG), a group of investors.

Accusing NSE of having issued some circulars deliberately to favour stock brokers, in violation of SEBI rules and guidelines, the IPG plea had sought the court's directions to SEBI to probe the issuance of those circulars.

The IPG said the bourse had deliberately issued these circulars, violating SEBI rules and guidelines, that protected investors and pleaded to the court to take appropriate legal action against NSE and declare its circulars, creating ambiguity, as "null and void."

The counsel, appearing for SEBI, said if the investors were aggrieved, they should go to the appropriate forum for redressal of their grievances.

The counsel for the investors, however, pointed out that the IPG had lodged a complaint in September but no action has yet been taken.

The group of investors also alleged NSE is acting as an informer to brokers by retrieving important information from investors and providing the same to brokers.

deepak sahney

5 years ago

yes, we need groups like IPG who on behalf of the investor, will fight and regain lost confidence of small retail investors in various asset classes. I support IPG wholeheartedly. GO IPG GO

Rishikesh

5 years ago

I support IPG and their initiative. Well Done.

Dushyant Bhalla

5 years ago

Well Done IPG, awaiting your SUCCESS and the success of many other innocent investors like me. GO IPG GO

Rahul Singal

5 years ago

Welcome IPG, Thanx for standing up against the corruption of our system. Its about time these organisations learnt a lesson. WE WILL NOT BE TAKEN FOR A RIDE!! I support IPG. GO IPG GO

Aparna Krishnamurthy

5 years ago

The IPG is definitely a welcome initiative to safeguard the interests of innocent investors. GO IPG GO

Jain Pal Jain

5 years ago

Brokers are not following SEBI guidlines in letter & spirit.SEBI imposes token penalty wheneve the voilation is detected without considering the possible sufferings of investors.SEBI should impose examplary penalties on voilations.

Ridhima Kumar

5 years ago

I support INVESTOR PROTECTION GROUP. The next best thing to the Anti Corruption Scheme of Anna Hazare. I think the next slogan that India would now rock to "GO IPG GO"

ketan sahney

5 years ago

its a welcome initiative by IPG, my support and good wishes are with you.

Nandan Singh

5 years ago

I support IPG and their cause and concern. WAKE UP SEBI AND NSE, INVESTORS ARE AWARE AND KICKING..

Should IRDA allow agents to sell products of more than one insurer?

IRDA may allow agents to sell products of more than one company similar to opening bancassurance to two insurers. Will it help agents increase remuneration or confuse customers and undermine the intension of the change? Will it increase mis-selling?

Insurance Regulatory and Development Authority (IRDA) plans to allow agents to sell products of more than one insurance company just as they are considering opening bancassurance to allow selling insurance products of two companies. There are arguments from both sides, but private insurers will stand to benefit more than LIC.

An official from the Life Insurance Corp of India (LIC) said, “Customer buys LIC product due to trust in the company. If agents sell insurance products of more than one company, they will be seen as mere individual and no longer carry the goodwill of LIC. The customer will get suspicious and not make buying decision. Even if 2% of the agents indulge in mis-selling to earn higher commission, it will ruin the whole system. As such, insurance is push product in India and takes lot of efforts by the agents to make a sale.”

Private insurers on the other hand have lot to gain as they may be able to tap into the huge pool of about 13.5 lakh agents of LIC. Their interest will mainly be the big agents of LIC who can drive volumes and help penetration. There has been steep decrease in the number of agents in life insurance business and opening of tied agency will only help private insurers. According to Life Insurance Council, “The number of agents came down from 3 million in 2009-10 to 2.65 million in 2010-11.”

Amitabh Chaudhry, managing director and chief executive, HDFC Life, said, “I know the regulator has brought this up in a recent interaction with media. However, I think it is a bit early to comment without getting to know more about this. On the face of it, such a move will help agents to offer more choice, which is good for the customer. It might also help bring agents back to the industry since the completion of a licensing process will enable them to get two licenses which is a positive for the agent”.

“We have seen almost three lakh agents have gone out of the pool in the last year since the economics of life insurance business doesn't enable them to go out and connect with customers, provide right financial advise and service the customer over the long term. The small and mid-sized agents who were instrumental in spreading life insurance across the country are not willing to get into the industry. Will allowing agents to sell products of two life insurance companies redress that? Also, will we have safeguards against unintended consequences of such a move like agents churning the customer portfolio between two insurers? I don't think we can answer these till we have a more detailed proposal from the regulator. If it does manage these issues, I am sure the industry and the agents will welcome it,” Mr Chaudhry added.
 
The bigger question is whether IRDA will really open the tied agency model? According to a life insurance agent, “IRDA talked about it when it came in existence. Due to opposition from LIC they (IRDA) put it off for 10 years. Over 90% of LIC agents work part-time and allowing them to sell other insurer products will help in increasing their remuneration. Ultimately, the choice should be left to customer and agent. Today, agent cannot talk about products from other insurance company and hence cannot offer best insurance to a customer. Moreover, if brokers are allowed to sell all insurance company products, why not agents?”

“General insurance agent association had in the past recommended to IRDA about allowing agents to sell mediclaim and other general insurance products from more than one insurance company. IRDA argument in the past for not allowing was about insurance company spending on agent training. At that time they were thinking of opening of tied agents if they had completed certain number of years in the business,” said another agent who sells general insurance products.

Life and general insurance agents also sell other financial products like mutual funds and there may be no real need for them to be tied to one insurance company. In UK the tied agency model has vanished. Are there any local circumstances that prevent from India to adopt the same?

You may also want to read...
Bancassurance turns into an assurance that is not bankable
Bancassurance:The more the merrier?
IRDA chairman not convinced on opening up bancassurance to two insurance companies

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COMMENTS

Tushar

5 years ago

Agents should be allowed to sell products of different companies. It will allow agents to provide better service to buyers as they will be able to offer them products that best suit their unique situation. Currently agents push buyers towards products that their company offers even though it does not cover the clients requirements. To prevent agents from simplying selling based on commission the agents incentive should be clearly mentioned in all products. In fact insurance incentives should be modeled like mutual funds.

i have personally facted this problem when i was buying insurance. it was a huge hassel to contact multiple agents and then compare their offferings. each agent would talk down the other companies product.

Venkat Aiyer

5 years ago

The apprehensions of losing business expressed by LIC regarding IRDA allowing insurance agents to sell products of two insurance company is baseless. On the contrary, LIC will gain as agents of private insurers will also opt for LIC as LIC products are much easier to sell since LIC is a household name and much respected insurer.

Abhijeet

5 years ago

IRDA as an organization failed to do for which it has formed.When ULIP policies were selling like hot cake by fooling the policyholders it was sleeping.when rome was burning nero was fiddling. In ULIP cases SEBI took the strong objection. You can give me only one single remarkable decision taken by IRDA for the benefits of policyholder &/or insurance industry. Now this decision is taken only because pvt insurers are suffering. When 2 years back when LIC's business was snatched by pvt insureres due to ULIP policies IRDA was sleeping. IRDA is to be dismasntled with immediate effect and all the IRDA officials should be made AGENT so that they can know how hard is to sell insurance business.

Hemanshu Parekh

5 years ago

I belive this is a good move. In fact you should welcome every change and except it as an opportunity.I think this will reduce Mis or biased Selling,on the contrary I would like if agents can be allowed to sell products of all insurance companies as in case of brokers and Mutual fund IFA"s.One thing to be noticed is that agents should be given proper trainings.Every new change is first opposed strongly and then accepted later.

ANIL VANJPE

5 years ago

long time misconception for ins. agent has to change.they r better equipped with technology,study,seminars, etc.traditional image of ins. agent ghost has to to be done with.max. misselling takes place from corporates,bankassurance.their knowledge,vision is limited. if they r permitted multi product selling, euality must for individual agents.

Madhusudan Thakkar

5 years ago

This is a step in right direction."Better late then never".It makes no sense of having tied-agency concept.In mutual fund there is no tied agency concept
After new rules of ULIP came into existence the premium collection,number new policies,activisation etc has come down drastically.The average earning per agent has also reduced.New recruitment of Agents is also down because average earning per agent has reduced to Rs.3000/- per month from Rs.5000/- per month after new ULIP guidlines.
Tied-Agency made sense when there was no other distribution channel except agency channel.Presently all Life Insurance companies have muliple distribution channel like Banks,Brokers,Business Associate and so on.Furthermore most of the life insurance companies are also selling Term & ULIP plan on ONLINE platform also.
If an agent is allowed is sell products of more than one life insurance company the customer will have meaningful choice .
So it is a WIN-WIN situation for Insurance Companies,Agents & Customers
In the beginning IRDA should allow Agents to sell products of TWO companies without further delay.

VIPUL PANDYA

5 years ago

The proposed move will only bring unathecial practice in the industry , some companies will give temptation of illegal type benefits to agents for business and all these will be on the cost of loss to customer

REPLY

Madhusudan Thakkar

In Reply to VIPUL PANDYA 5 years ago

What is preventing Insurance Companies from launching contests,and other type of benefits ?On the contrary Agent will sell product of those companies whose fund performance/Bonus rate is high.Whose death-claim settlement is and other services are better.It will make Insurance companies more RESPONSIBLE if the want Agent to sell its products

Santosh Bhandarkar

5 years ago

It is the customer who will benefit the most due to this change. The Customer has a faith with one agent / advisor and he is selling only one company product. If the same agent sells insurance of many companies, he shall help the Customer to chose right insurance product. This shall also reduce the cost of Term Insurance over the period due to competation. And we all know Term Plans are very important in Financial planning.

v chandru

5 years ago

LIC will be the beneficiary,if the agents can act for more than one insurer. LICs trust and high net worth will attract more agents to procure business for them. The other insurers agent will get more remuneration by procuring business for LIC. On the other hand LIC agents have to face still
more competition with other agents.

REPLY

Madhusudan Thakkar

In Reply to v chandru 5 years ago

I agree with you.LIC can be a beneficiary.Most of the Agents of private Life Insurance companies will also take agency of LIC because of its popularity & acceptability.But at the end of the day CUSTOMERS will be greater beneficiary.

Abhijeet

5 years ago

IRDA as an organization failed to do for which it has formed.When ULIP policies were selling like hot cake by fooling the policyholders it was sleeping.when rome was burning nero was fiddling. In ULIP cases SEBI took the strong objection. You can give me only one single remarkable decision taken by IRDA for the benefits of policyholder &/or insurance industry. Now this decision is taken only because pvt insurers are suffering. When 2 years back when LIC's business was snatched by pvt insureres due to ULIP policies IRDA was sleeping. IRDA is to be dismasntled with immediate effect and all the IRDA officials should be made AGENT so that they can know how hard is to sell insurance business.

Sanjay

5 years ago

This is one of the path breaking reforms IRDA is doing by doing away with tied agency. This will decrease the number of employees of Private sector companies and hence profitability would be better in the coming years. IRDA should complete the process and make it a law form Jan 1st 2011.

REPLY

Sanjay

In Reply to Sanjay 5 years ago

Please read Jan 1st 2011 as Jan 1st 2012.

prashant bhawar

5 years ago

I think this will very bad for working agent instead of this IRDA have to make a criteria for selling multi insurance like one more exam! Means only talented people who have the knowledge of financial market and study of all plans of all company this will help full for customer for right product and IRDA moto will complete

REPLY

Madhusudan Thakkar

In Reply to prashant bhawar 5 years ago

You must be aware that new syllabus of pre-recruitment of Agents is MUCH MUCH BETTER than previous one.Previous syllabus had only INFORMATION and new syllabus has KNOWLEDGE.Furthermore training is an on going process .

Vikas Gupta

5 years ago

I think that it would be a welcome move for the Industry, Insurance Advisors & Common man. It would be a win win situation for all as the Total No. of agents working for all Insurance Co.s would increase, The advisors have more choices to seek a product according to his Customers requirement & the Customers could ask his trusted Advisor the more options as per their needs.

REPLY

Madhusudan Thakkar

In Reply to Vikas Gupta 5 years ago

You are right Vikas Ji, An Agent by SWOT[Strength,Weakness,Opportunities,Threat]of a particular plan of different life insurance company will help customer to select the best plan according to needs,budgets,expectations and so on.It will be DEMOCRATIZATION of Agency force in the true sense of terms.

NAVNEET MITTAL

5 years ago

Allowing insurance agents selling products of more than one co will be the best practice in the industry because

a) It will allow agent to sell the best product available in the industry and earn rather than telling mine is better as he can't sell other.

b) In turn the real competition will take place as the co's would have to make the better product available to his agent otherwise he will sell others.

c) The new rule would allow new breed of full time agents as they can earn good amount becoming full time insurance agents.

d) It's truly in favor of clients as they can expect the best product from their existing agent and not wandering here and there in search of best product.
So IRDA should allow all agents to sell products of all insurance companies (life and general) and offer the best product in the market.

e) If a agent can't compare the products of different co's then how an ordinary customer can choose the best . He is always trapped by the best sales person not by the best product.

Underground Metro in Pune will not be as costly as portrayed by DMRC, say experts

Experts and activists who under the Pune Metro Jagruti Abhiyaan have been campaigning for a well planned metro, may have some hope now

Unarguably, public transport is the biggest issue concerning Pune. With nearly 25 lakh private vehicles on roads, more than 70% of which comprise two-wheelers, traffic chaos on roads has turned commuting into a nightmare. Add to this is poor show of the Pune Municipal Corporation (PMC) in the management of public transport buses and BRT routes.

It was against this background that the Pune Metro proposal was floated in 2008. However, predictably, lack of application and transparency put the metro proposal, made haphazardly by the Delhi Metro Rail Corporation (DMRC) into a whirlpool of controversy. The Detailed Project Report (DPR) of the Pune Metro was passed by 143 out of 144 corporators unanimously in a few minutes, without even studying the proposal. When the lone independent corporator Ujwal Keskar asked for its copy at that General Body meeting where the resolution was passed, the city engineer replied that "He had forgotten to get it''. So much for the seriousness of the most expensive project ever to come to Pune, then estimated to be over Rs10,000 crore.  

Things began to derail in 2010 when the PMC declared it would choose the least priority corridor of around 16 kms, completely elevated running though congested roads; would demolish heritage structures and residential buildings, would go over sensitive areas like Pune Railway station (for which permission was not sought) and 4 FSI would be permitted along the corridor which would lead to unimaginable congestion and stress on civic infrastructure. The haphazardness also reflected in the casual manner in which the DPR stated levying of an array taxes on citizens for any number of years without giving specifis; location of metro depots which were opposed, one by the College of Agriculture authorities and the other at the Kothrud garbage dump, earmarked for ShivShahi Pratishthan.  

The Pune Metro Jagruti Abhiyaan (PMJA), an umbrella of organizations comprising civic and social activists, civil engineers, architects and urban planners and corporate leaders campaigned rigorously through mass awareness campaigns through PPT presentations and intense dialogues with political leaders of the city and state as well as officers of the PMC administration. The demand was an independent assessment of the faulty DPR and to consider an underground metro for the maximum effect in terms of passenger utlisation and undisturbed progress of work.  

Hyderabad Metro is a sterling example of the progress of its elevated metro stuck due to 60 per cent of land acquisition either in litigation or vehement opposition. The Jaipur elevated metro too has brought in demands by citizens of stopping work midway due to enormous inconveniences to citizens.  In Mumbai, the fully elevated 12 km Versova-Ghatkopar corridor which was scheduled for completion in December 2010 is not even 50 per cent complete. The second corridor of Charkop-Bandra-Mankhurd also fully elevated and scheduled to complete in December 2014 is yet to clearances from MoEF, Coastal regulation autorities, Fire department, civil aviation and railways. Now, wisdom has dawned, as the third corridor of Colaba-Bandra which was to be partly elevated is now going to be completely underground.

Despite intense dialogues with stakeholders by the PMJA, the PMC passed the defective Pune Metro proposal wherein a large part of the funding was to come from the state and central government. However, it is languishing with the state government since the last one year. Thankfully, deputy chief minister Ajit Pawar declared last week that after seeing the mess that elevated corridors have created in cities like Mumbai, Hyderabad and Bangalore, he would support underground metro for Pune, even if it is not as cost-effective as the elevated metro, since in the long run the former would be more beneficial.

Underground Metro for Pune which was one of the primary demands of PMJA seems to suddenly have a glimmer of hope.  In a Press Conference organized by PMJA on Monday evening, Arun Firodia, leading industrialist and an integral part of the PMJA campaign through MCCIA's social NGO Janwani stated that, "We welcome the statement by Pune's Guardian Minister Mr Ajit Pawar supporting underground Metro for Pune. As against the common perception that an underground metro will take time, it, in fact can be implemented faster as there would be very minimal land acquisition issues; no shifting of utilities as an underground metro would be below 15 or 30 metres; no disturbance or inconveniences to citizens as work would not be on the road - the machines would be working smoothly and uninterrupted below the soil.''

Narendra Bhagwat, underground metro expert who was a consultant for the Bangkok, Bulgaria and part of Delhi underground metro said, "Pune being in the Seismic Zone IV, it was unadvisable to have an elevated metro. Underground metro is ideal for Pune as it has hard rock, which is extremely good for the corridor. All over the world, it has been observed that an elevated metro has a life of only 20 to 30 years whereas underground metro lasts more than 100 years as has been witnessed in cities like London and Moscow.''

 Talking about the costs, KK Gokhale, railway engineering expert said, "The DMRC's DPR has touched upon only the construction cost for the elevated corridor which PMC has chosen to build first but it has not taken into consideration land acquisition charges, shifting of utilities etc which it has put the onus on the PMC. Also, an elevated metro corridor has to go along the road design whereas the underground metro has no such restrictions and therefore the routes will be shorter, thus saving upon money and the network between stations would be more comprehensive and easier to build.''  

Civic activist Prashant Inamdar said, "DMRC report also states (Chapter 4, pg 2) that underground metro is preferable over elevated metro if corridor is on busy roads.''

 So, what is now required for the consideration of Underground Metro as the elevated metro proposal is already with the state government? Experts stated that, ``there is already a few kilometers of underground metro line planned in the present DPR - all that is required is modification in the plan.'' Corporator Ujwal Keskar who is also keen on a underground metro plans to seal it technically in the parliament of the Pune Municipal Corporation in a day or two before the code of conduct comes into effect for the PMC elections to be held early next year.

(Vinita Deshmukh is consulting editor of Moneylife. She is also an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She can be reached at [email protected]).

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COMMENTS

namrata Kirtikar

5 years ago

My friend Mr. Ramdas Shanbhag My freind) who mannaged the work in NewYork for 30 yrs for underground metro .. He is a person who would not compromise for quality ...he would be most happy to work for this project as a tribute to India...tell me if you want such people to work without any compromise for quality???
he is available on Linked In.

Namrata Kirtikar

Sachin Bhutada

5 years ago

I Congratulate Vinita and Moneylife for bringing such an important topic in public domain.
Pune desperately needs a good public transport system.The current system cant even be termed as existant.But still,the metro should be planned looking at the long term benefits (of the city and people).
I pray that the efforts of such organizations pay off.

Ranjit

5 years ago

In fact it is high time someone did a proper analysis of the cost overruns due to delays in land acquisition and included this in the DPRs when comparing elevated as opposed to underground Metro. Hyderabad Metro is already 5 months behind due entirely to land acquisition problems. How much has this added to the price tag?

malq

5 years ago

The potential of amazingly high property development underground in the costliest parts of town and consequential potential benefits for those who can get hold of them are being realised in Delhi - where DMRC has been able to close out and ensure that the said benefits are ploughed back into the public transportation infrastructure for greater common good. It is like a gold mine - and when you add the above ground real estate multi-utilisation, even more so.

Knowing Pune and the real estate "games" there, it would appear that this "benefit" has not escaped the notice of those who would certainly give it a go.

Therefore, please ensure that all benefits of property development underround in the Pune Metro are ploughed back into the transportation infrastructure itself - not into somebody's private benefit funds.

Good luck!!

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