SEBI proposes regulation for investment advisors

“While the activity of giving investment advice will be regulated under the proposed framework through an SRO, issues relating to financial products other than securities shall come under the jurisdiction of the respective sectoral regulators such as action for mis-selling, violation of code of conduct, conflict of interest, etc,” SEBI said in the concept paper

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has proposed new rules for investment advisors that will require them to be registered with a self-regulatory organisation (SRO) before undertaking such a role, reports PTI.

The proposed framework intends to regulate investment advisory services in various forms including independent financial advisors, banks, distributors and fund managers.

The proposal has been mooted by SEBI in a concept paper, floated in September last week.

“While the activity of giving investment advice will be regulated under the proposed framework through an SRO, issues relating to financial products other than securities shall come under the jurisdiction of the respective sectoral regulators such as action for mis-selling, violation of code of conduct, conflict of interest, etc,” SEBI said in the concept paper.

Persons or entities seeking registration as investment advisors shall have to obtain it from the SRO.

“The SRO formed to regulate investment advisors will be registered under the SEBI (Self Regulatory Organisation) Regulations, 2004.

“Its duties would include registering and setting minimum professional standards, including certification of investment advisors, laying down rules and regulations and enforcing those; informing and educating the investing public; setting up and administering a disputes resolution forum for investors and registered entities, etc,” SEBI said.

Entities registered with SRO will provide advice on investments in financial products or products that are traded and settled like financial products. The services will include financial advice, financial planning service and actions which would influence an investment decision.

Besides, representatives of investment advisors or their intermediaries would also be eligible.

“Investment advisors tend to call themselves by varied names viz. wealth managers, private bankers, etc. This causes much confusion as to their role and responsibility.

“Hence the regulations will provide that no person can carry on the activity of offering investment advice unless he is registered as an investment advisor under the regulations,” the SEBI paper said.

SEBI said that in case of corporate entities, eligibility criteria would include banks providing investment advisory or wealth management services and other entities representing an investment advisor.

“A person shall be deemed not to be engaged in the business of providing investment advice, if the advice is solely incidental to some other business or profession and the advice is given only to clients of the person in the course of such other business or profession...” SEBI said, adding that advocates and solicitors, chartered accountants and stock brokers, among others would be in this list.

For registration with SRO, individuals would require professional qualification like Chartered Accountancy or MBA or certification from other institutions recognised by SEBI.

In case of entities, they would need to maintain a minimum net worth which would be separate from the net worth required for other activities and should have at least two key personnel having the relevant experience exclusively for acting as investment advisors.

“The investment advisor will be responsible to maintain confidentiality of the... (and) would be required to do adequate risk profiling of the client before any investment service is provided to them,” SEBI said.

It said that records in support of every investment recommendation or transaction have to be maintained and retained for at least five years.

“Investment advisors shall not accept funds/securities from investors, except the fee for investment advice... Other than sourcing of research reports, no other part of investment advisory activity can be outsourced,” the concept paper added.

User

Low turnout marks Anna’s fast

The Gandhian, who began the latest round of protest ignoring concerns over his health, asserted that the ambit of his agitation will soon be expanded to include radical electoral reforms like Right to Reject candidates

Mumbai: A surprisingly low turn-out marked the launch of social activist Anna Hazare’s three-day fast against the government’s Lokpal bill which he described as ‘betrayal’ of the people, reports PTI.

As 74-year-old Mr Hazare sat on the fast at the MMRDA ground, the estimate of people at the venue varied between 4,000 and 10,000 in sharp contrast to the 30,000-40,000 that poured in Ramlila Maidan in August.

Team Anna had said that they expected over a lakh people to turn up at the protest venue here. In Delhi too, a negligible number of protesters were at Ramlila Maidan.

Addressing the protesters, Mr Hazare vowed to continue the “fight to the finish”, warning the UPA government that he will campaign against it in the upcoming assembly elections in five states and later in the Lok Sabha polls.

The Gandhian, who began the latest round of protest ignoring concerns over his health, asserted that the ambit of his agitation will soon be expanded to include radical electoral reforms like Right to Reject candidates.

Seeking to broad base his agitation, Mr Hazare said he has invited Baba Ramdev to join his stir and the yoga guru will visit the fast venue tomorrow or the day after.

“It is going to be a long-drawn battle. The agitation for a strong Lokpal is like second war of independence and it has to be treated like that. We have to fight to the finish, even if we have to go to jail, we don't care,” MR Hazare, who looked a little under the weather but resolute as usual, said.

Accusing the government at the Centre of betraying the people, he said, “This is not betrayal of Anna Hazare or Team Anna. This is the betrayal of people who will teach you a lesson.”

Mr Hazare, who is suffering from viral infection, reaffirmed his decision to campaign against the Congress in all the five election-bound states that includes Uttar Pradesh.

“Some people are trying to threaten us. They say they will not allow us to visit (the states where polls are to be held). Those whose fear of death has died don't fear anything,” he said.

Mr Hazare said he would tour the entire country to spread awareness about the intentions of the government. “We will tell them that the nation’s treasury is under threat more from its keepers than thieves. The nation faces greater threat from traitors within than enemies outside.”

User

Meeting of oversight panel on RIL’s KG-D6 block postponed

Oil ministry joint secretary (exploration) DN Narasimha Raju and DGH director general SK Srivastava, who had confirmed participation in the Management Committee meeting scheduled at 1130 hours today, recused themselves at the eleventh hour, citing personal reasons

New Delhi: A meeting of an oversight panel to vet Reliance Industries’ (RIL) $1.529 billion investment plan for development of satellite fields in the KG-D6 block was postponed today after government representatives declared themselves unavailable for the meet, reports PTI.

Oil ministry joint secretary (exploration) DN Narasimha Raju and Directorate General of Hydrocarbons (DGH) director general SK Srivastava, who had confirmed participation in the Management Committee meeting scheduled at 1130 hours today, recused themselves at the eleventh hour, citing personal reasons, sources privy to the development said.

The oversight panel, called the Management Committee, was to consider giving approval to the proposal by RIL to develop four satellite fields in the flagging KG-D6 block.

Development of the four fields by 2016 would help arrest the fall in output in the producing fields.

Sources said no new dates have been intimated for the MC meeting. Mr Raju, who along with Mr Srivastava did not attend the last KG-D6 MC meeting on 2nd December that failed to approve the development plan, is completing his deputation to the oil ministry on 5 January 2012.

Incidentally, a separate meeting of the MC on blocks operated by state-owned Oil and Natural Gas Corporation (ONGC) took place as scheduled this afternoon.

The KG-D6 MC was to consider the Field Development Plan for the Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields surrounding the currently producing D-1 and D-3 fields.

The fields can produce 10 million metric standard cubic metres of gas per day (mmscmd) by 2016 and will help shore up output from the block, which has seen a 35% drop in output in the past 15 months.

The MC had in its last meeting on 2nd December refused to approve the investment plan, saying the proposal made in December 2009 was based on the prices of that year and new rates needed to be worked out at the current prices.

Sources said RIL and its partners, UK’s BP Plc and Niko Resources of Canada, felt reworking the rates would require several months and would lead to the loss of the four-month fair weather window in the Bay of Bengal that began this month.

As a compromise, RIL agreed to cap spending on the four fields at $1.529 billion, plus or minus 15%.

This includes $30 million on pre-development activities that RIL and BP have insisted on taking up during the next quarter, including pre-engineering and other studies.

RIL has so far made 18 gas discoveries in the KG-D6 block. Of these, D-1 and D-3—the largest among the lot—were brought on to production from April 2009 but output has fallen from 54 mmscmd, reached in March 2010, to 31.86 mmscmd this month.

Together with 6.83 mmscmd of associated gas produced from the MA oilfield in the same area, total production from the block is 38.66 mmscmd.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)