Reply to SEBI on 21-Apr-2019
Name
of the Entity/ Person: Atul
Gandhi CommunicateAtul@Gmail.com
9371331337
|
|||
Sl.
No.
|
Reference
Para of the
Consultation
Paper or other
provisions
of the SRO
Regulations
|
Suggestions
|
Rationale
|
1.1.1
5.5.1
5.5.4
|
Option
A)
Most
preferred option
Single
SRO for all people / entities doing business in securities market
Research
analyst
Investment
Advisor
AMC
Mutual
fund
PMS
IA
/ RA
Broker
Television
Print
media
competitions/games
Open
/ electronic media like facebook / twitter / youtube etc
Legendary
wealth creator people like Rakesh Junjunwala speaking in public
Option
B)
Second
preferred option
Have
separate SRO for
a)
IA doing financial planning
b)
IA doing mutual fund advisory
c)
IA doing stock market advisory
|
Rational
of Option A
1)
Level playing field: Regulation / business environment /
law / legal environment should be same / treat all people /
entities /intermediaries doing business in securities market
2)
Some months ago Research
analyst regulation restriction
made mandatory for Investment
Advisor. If Research
analyst regulation restriction
made mandatory for Investment
Advisor , then
logically it should have been made applicable to other
intermediately doing business in stock market like broker or
portfolio manager appearing in public media discussing stock with
or without consideration
3)
Portfolio manager can invest in a stock / sector and then come on
public media like CNBC tv & talk positive about stock / sector
they invested. But IA is put under RA regulation restriction. Law
should be equal to all
4)
Say a portfolio manager invests in a stock and then talk positive
in CNBC. Portfolio manager did not get any consideration for
talking positive, but it is likely that that stock may go up &
Portfolio manager get indirectly benefited. And after few weeks
/months, Portfolio manager can exit stock & at the time of
existing stock he may not inform on CNBC.
5)
It is possible
:
One arm of institution buys a stock and afterword other arm of
same institution recommend same stock to public
:
One arm of institution recommends a stock to public and other arm
of same institution sells stock /books profit.
Those
who got lot of money power, can create different vertical i.e.
subsidiary and offer all kind of financial service (one stop
financial shop)
Whether
department / division or subsidiary, ownership remains same
Ultimately
management, beneficiary & profit of business goes to owners of
business, & SEBI has chosen to overlook this factor
6)
Financially rich institutions should not be given preferences /
advantages / treated differently / different law over investment
ad visors.
7)
Broker, who is interested in broking income, can give research
report / investment advice. SEBI says its incidental to their
business. But restrictions on IA / RA has been put by SEBI
8)
Investor can get input from print-tv-online media without risk
profiling and KYC. Restrictions on IA and RA are put by SEBI
9)
IA
regulation put compulsion for doing risk profiling. Regulation
clearly mentions that “income details” and “existing
investments/ assets” should be taken from client
But
Investor
can open demat & trading account without doing risk profiling
Investor
can buy or sell stock as per his wish without doing risk profiling
Investor
can take input new paper or CNBC or other media & buy or sell
stock without doing risk profiling
10)
Law should be same for all intermediaries as well as
print-tv-online media in securities business.
Rational
of Option B
1)
Consultation
paper says there are
are
approx. 1,24,000+ distributors of MF products Vs only 1,136 IAs
registered with SEBI as on March
IA
are less than 1% of total. IA business model is very different
from distributor, so we need different SRO.
2)
Put in simple words
Differnt
SRO for
1)
intermediaries doing financial planning
2)
intermediaries doing mutual fund business
3)
intermediaries doing only stock market advisory
3)
In past I am registered myself as Investment advisor, offering
investment advisory service in stock market.
I
advice for direct buying / selling in stock market
MF
is distributor does not advice direct investment in stock market.
At AMC there is fund manager who decides buying / selling in stock
market
Business
structure / nature are different. So need is there for separate
SRO
|
|
No comments:
Post a Comment
Comments