The government and financial sector regulators have decided to work out a policy for regulating financial intermediaries to reduce the scope of mis-selling of products and improve investor education. A panel, headed by Pension Fund Regulatory & Development Authority (PFRDA) Chairman D Swarup, has been set up as some of the regulators believed that investors were unable to make an informed decision due to the fragmented nature of various segments of the financial sector.While an earlier panel headed by the then Insurance Regulatory & Development Authority (Irda) Chairman C S Rao had concluded that investor advice being rendered was more-or-less fine, some of the regulatory agencies were learnt to have raised concerns.
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PLUGGING HOLES |
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* A high-power committee has been set up to regulate financial intermediaries and bring in uniform norms for all financial products |
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* The panel, headed by PFRDA Chairman D Swarup, includes representatives of the RBI, Sebi, Irda and Finance Ministry |
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* The panel will examine if there is a need to have a set of regulations for financial advisors and find ways how to regulate them better |
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* The committee has already had its first meeting |
As a result, the high-level committee on capital markets, comprising top officials from the regulatory agencies and the finance ministry, recently suggested that a fresh look into the matter needed to be taken.
Mutual fund and insurance products were being sold under different sets of norms with high degree of variation in commission structures. Apart from this, there is a dire need to adequately and efficiently use the huge amount of investor protection fund lying with regulators for investor awareness and education purpose.
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