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India will have an extensive regulatory system for clinical trials in place by the next 18 months
India will have an extensive regulatory system for clinical trials in place by the next 18 months, under which regular random on-the-spot inspections will be carried out from July 2010, a top official said on Thursday.
"We will completely change the regulatory landscape for clinical trials in 2010. This will be a historic year in that regard. We are putting in place a system brick-by-brick by the next one year or 18 months," drug controller general of India Surinder Singh told PTI.
Mr Singh, who was addressing a symposium on 'India—An Emerging Destination for Clinical Trials' organised by the Institute of Clinical Research, said among the key steps will be launching of random inspections of trial sites, which can be started from July this year.
"Inspectors will visit trial sites with an updated checklist. This will ensure protection of volunteers, reliability of data and proper checks and balances," he said but made it clear that industry will not be 'harassed'.
Mr Singh said that several workshops on clinical trial inspections have been held in collaboration with the US Food and Drug Administration (FDA) and the World Health Organisation (WHO) and another is scheduled to be organised in April. The number of drug inspectors will be increased, he said.
The other measures which have been or will be undertaken include mandatory registration of clinical trial proposals and forming guidelines for ethics committees.
The Supreme Court has extended its interim order banning mining and transportation of iron ore by OMC, owned by Karnataka's Reddy brothers
The Supreme Court on Thursday extended its interim order banning mining and transportation of iron ore by Obulapuram Mining Company (OMC), owned by Karnataka's Reddy brothers in Anantapur district of Andhra Pradesh (AP), reports PTI.
However, the apex court referred the matter back to the AP High Court, asking it to take a decision expeditiously.
The order to this effect was passed by a bench headed by Chief Justice KG Balakrishnan after OMC and the AP government consented to the suggestion made by the bench in this regard.
The apex court said that the AP government will file its response within a week before the High Court. It also asked the parties to the dispute to appear before the High Court, which has posted the matter for hearing on 18th January.
The AP High Court had stayed the government order of the AP government, restraining the company from carrying out mining activities in the area on the basis of the report of the apex court-appointed Central Empowered Committee (CEC).
The AP government had challenged the High Court order in the Supreme Court. The apex court also gave opportunity to the CEC to appear before the High Court.
The CEC was constituted by the Supreme Court to inquire into the matter based on a writ petition filed by Tapal Ganesh of Bellary against OMC over alleged illegal mining activity in violation of the Forest Conservation Act, 1980.
SEBI's move to scrap entry loads on mutual funds may have been well intentioned, but it tripped badly in failing to assess the ground realities and the consequences of its actions
Five months after the Securities and Exchange Board of India (SEBI) scrapped entry loads on mutual fund (MF) schemes, the industry continues to be on the decline with further ill-conceived band-aid like trading through stock exchanges failing to attract investors. In the five months after the SEBI move, Rs7,200 crore of funds have moved out of equity schemes and flown, almost entirely, to Unit Linked Insurance Plans (ULIPs).
SEBI's move may have been well intentioned, but it tripped badly in failing to assess the ground realities and the consequences of its actions. It failed to visualise that sharply higher commissions paid by the insurance industry will suck money out of MFs. It also failed to ensure the availability of inexpensive alternative distribution channels. Consequently, investors continue to pay commissions, but only to other intermediaries such as banks or others in the exchange traded system. The question is, when will the regulator admit its mistake and initiate corrective action?
If SEBI had attempted to seek feedback before bringing in the regulation, it would have highlighted the impact of a hasty scrapping of entry loads on the fund industry and cautioned it against blundering ahead. A report by McKinsey & Co, the leading global consultancy firm, had enumerated some key issues even in August 2009, when the SEBI order came into effect. Even then, the fund industry was in turmoil and assets under management (AUM), which had been growing at 50% on a year-on-year basis, had declined by a sharp 17%.
McKinsey had pointed out that bank and national distributors who have control over the "customer's wallet" would be in a position to charge. That is exactly what is happening today. Banks were blamed for extorting huge paybacks from Asset Management Companies (AMCs), they have smoothly switched to debiting customer accounts for advisory fees.
McKinsey had also said that AMCs would have to continue compensating distributors (mainly banks) from their reduced fees. They may also increase exit loads for customers across holding periods—but this would be restricted to 100 bps. Here is what else McKinsey had predicted for the industry.
• Higher exit loads and transparent commissions would reduce the propensity to churn investments.
• Portfolio management services and alternate products will grow faster. AMCs and distributors will push higher margin products, especially debt products. This has indeed played out as predicted.
• The industry will undergo consolidation since smaller AMCs would find it difficult to manage the stress on their finances. Entry barriers will increase and it may even be difficult for new schemes to find distribution partners. However, the fact that SEBI has over 12 to 14 pending applications seems to suggest that the financial sector is not giving up on the mutual fund industry as yet.
• Most pertinently, the report had pointed out that it is IFAs (independent financial advisors) who help in geographic penetration of financial products. With IFAs, especially the smaller ones losing the incentive to sell mutual funds, the geographic penetration of the industry was bound to slow down. McKinsey's data shows that beyond the top eight cities, IFAs are the dominant distribution channel accounting for just under 50% of the market.