Finance minister Pranab Mukherjee conveyed to the BJP that the Lokpal Bill passed by the Cabinet on Tuesday night can be circulated to MPs only on Wednesday evening. He also said that the existing Lokpal Bill—introduced in the Monsoon Session of Parliament—will be withdrawn in Lok Sabha on Thursday and the new Bill introduced
New Delhi: A new Lokpal (Ombudsman) Bill will be introduced in the Lok Sabha on Thursday and the existing one withdrawn, reports PTI.
This was conveyed by the government to main opposition Bharatiya Janata Party (BJP) on Wednesday along with the intention to have a three-day additional sitting of Parliament from 27th December to take up this crucial Bill. BJP gave its nod to this proposal.
Finance minister Pranab Mukherjee held a meeting on Wednesday with leader of opposition in Lok Sabha Sushma Swaraj, her counterpart in Rajya Sabha (upper house of the Parliament) Arun Jaitley and BJP leader LK Advani to discuss the issue.
Mr Mukherjee conveyed to the BJP that the Lokpal Bill passed by the Cabinet on Tuesday night can be circulated to MPs only on Wednesday evening, according to sources. He also said that the existing Lokpal Bill—introduced in the Monsoon Session of Parliament—will be withdrawn in Lok Sabha on Thursday and the new Bill introduced.
Mr Mukherjee said that in this scenario, there was little option but to extend the Winter Session by three more days and discuss the Lokpal Bill from 27th to 29th December.
The BJP agreed to the proposal after initial reluctance. Party sources said its opposition is to the content of the Bill rather than extension of this session.
The Business Advisory Committee (BAC) will meet this evening to decide on the extension.
The government is keen to ensure passage of Lokpal along with two crucial legislations—Judicial Accountability Bill and Whistleblower Protection Bill—during the current session.
But since only two days are left, it wants additional sitting after the Christmas break.
The BAC had on Tuesday decided to hold an additional three day sitting from 27th December but later several MPs opposed it, prompting the government to say it will have a rethink.
Several MPs, including some from the UPA coalition, are still opposed to the three-day extension of the session.
Lokpal Bill was cleared on Tuesday night by the Union Cabinet. The new Bill will be a Constitution amendment Bill which will also bring the prime minister under the ambit of Lokpal with certain riders.
The Bill, however, keeps India’s investigation agency Central Bureau of Investigation (CBI) out of purview of Lokpal except on cases which are referred to it by the latter. The Lokpal will have its own wings for preliminary inquiries and prosecution.
The Lokpal will be a nine-member body including the chairperson.
Investors in Singapore must possess certain knowledge and qualifications if they want to purchase a mutual fund or similar products
In what could be a first of its kind, in Singapore, if anyone wants to buy a mutual fund (or any “Specified Investment Product”) directly, the person must be ‘qualified’ to do so. In other words, he/she must pass a test. And, no, they aren’t referring to financial intermediaries but ordinary investors, like you, who want to invest in the market.
The Monetary Authority of Singapore’s website clearly states that:
“...from 1 January 2012 onwards, financial institutions that act as intermediaries for these products will be required to assess whether a retail customer has the relevant knowledge or experience to understand the risks and features of a Specified Investment Product before offering the product to them. Intermediaries include financial institutions such as broking firms, banks, insurers and financial advisers.”
In other words, before taking a potential customer as a client, the financial intermediary must ‘assess’ the customer’s knowledge to check whether the same person is ‘fit’ enough to purchase the product.
“If the intermediary assesses that you do not have the relevant knowledge or experience to purchase the unlisted Specified Investment Product or to open an account to trade listed Specified Investment Products, they may suggest that you undergo learning modules to learn more about Specified Investment Products.”
“The intermediary will consider whether you have the relevant educational qualifications, work experience or investment experience in that product or similar products. They will also take into account whether you have demonstrated sufficient understanding of the product.”
This means that if the customer is not ‘qualified’ or ‘educated’, then he/she must undergo learning modules as specified by MAS. Whether the investor is ‘qualified” or ‘educated’ is highly subjective to the financial intermediary’s observation. The assessment of the same level of ‘knowledge’ may differ from one intermediary to another.
This move certainly safeguards investors, and perhaps, forcing them to educate themselves the nuances of finance and thereby increasing financial literacy levels. However, it is also a double-edged sword and there could be a negative ramification of this move.
Firstly, it increases the costs, both explicit and implicit, on both the investor and the financial intermediary. For instance, it would take up lot of time and expenses to just merely assess the ‘quality’ of a customer. Not only would the monetary cost of acquiring a specified product, such as mutual funds, increase, but also the hassle of obtaining one which would push the large populace away from investing in general.
Secondly, a lot of investors might just dabble in products that aren’t mentioned in the “Specified Investment Product” list. For instance equities, which is inherently riskier than mutual funds, is not mentioned in the “Specified Investment Product” list. This might make the system inherently more volatile rather than the other way round. If investors want to diversify their holdings, there ought to be easy to do it.
It is widely known that Singapore takes its investor protection and safety seriously—even though the regulators were behind the curve in assessing the safety of Lehman-linked bonds in 2008. In India, the Securities and Exchange Board of India (SEBI) has taken a supposedly pro-investor stance since August 2009 by banning upfront commissions for selling mutual funds and is now insisting that fund companies monitor their distributors so that they choose be either a simple distributor of financial products (sell whatever customers want) or advisors (sell what customers really need). And now, shortly regulations covering advisors would be issued. In India at least, investors have been let alone but who can say if India will import the bright idea from Singapore of putting investors through a test and killing the mutual fund market completely?
The proposed Bill will make builders accountable. No wonder, they are opposing it
In a vast...