Sebi raises concerns over mis-selling
Mint recently reported that Sebi is working on amending collective investment scheme norms and is working with the ministry of corporate affairs to frame rules to regulate multi-level marketing firms. Photo: Abhijit Bhatlekar/Mint
Also Read
Updated: Thu, Apr 04 2013. 12 37 AM IST
Mumbai: The Securities and Exchange Board of India
or Sebi said on Wednesday it was concerned about rampant mis-selling of
financial products in the country.
Sebi chairman U.K. Sinha
said there have been multiple examples of mis-selling and the market
regulator is working on ways to create awareness among investors and
bring in appropriate regulations.
Mint recently reported that the regulator was
looking to amend collective investment scheme or CIS norms and working
with the ministry of corporate affairs to frame rules to regulate
multilevel marketing or MLM firms.
Sinha estimated that the money raised illegally in
violation of CIS norms could be as much as Rs 10,000 crore. He said
Sebi’s role was to ensure that products sold to investors were legal and
to do that the support of state governments and the investment
community was critical. Sinha was addressing a seminar organized by the
Indian Merchants’ Chamber or IMC in Mumbai.
The regulator will also launch more investment awareness
campaigns to ensure that people do not lose money in large numbers and
that the credibility of the market is not eroded.
Sinha pointed out that it was not only real estate and gold that are diverting investments from the financial market.
“There are other areas one should start worrying about
(such as) the rapid development of grey market of investment in the
country,” Sinha said.
The Sebi chief also referred to the example of a firm
that is returning a substantial amount of money to investors as an
example of the regulator’s concerns. He didn’t name the company.
“There is a famous instance where a company has claimed
that it has refunded more than Rs20,000 crore in the last three-four
months to so-called investors. More than 90% has been returned in cash.
How feasible and credible this story can be?” Sinha said.
No comments:
Post a Comment