After changing “Name of entity / person / intermediary/ Organization*”and “Investors Name” with your name.
Copy and Email this draft to:
sebiria@sebi.gov.in
Before 4th Nov. 2016
Email SUB: Feedback on RIA’s Consultation Paper
Dear sir \ Madam
I have gone through your RIA Consultation Paper and found it is the best move to protect the Investor’s interest as an investor I have noticed, even though every aspect is kept in mind to protect investor, something is left which may hurts and not good from Investor’s angle which I want to highlight and hope that it will be implemented in the final draft of the paper
By referring point No. 4.1.3
“In terms of IA Regulations, investment advisers are not allowed to sell any product and/or to provide execution services. Only corporate entities registered as investment adviser can offer execution or distribution services, subject to the condition that the investment advisory services are offered through separate identifiable division or department.”
Problem: I found that investors might be hit by double charges
1 RIA Fees and
2 Commission Charges paid to Distribution Channel of Corporate RIA.
Solution: It should be banned for RIA’s Distribution Channel to distribute regular plans in which commission is paid to the distribution channel to avoid double charges.
By referring point No. 4.1.4 – c)
“The person who seeks to continue to engage in the distribution of mutual fund products shall use the nomenclature as ‘Mutual Fund Distributor’. Such person shall not be allowed to provide basic or incidental advice in respect of mutual fund products except describing the product specification without recommending any particular product.”
Problem: I found that there is a pitfall for Investors that Distributor will give him choices of their own benefits and will act like gift shop sales person. One more thing is that when there are no responsibility chances of misselling will be increased.
Solution: MFDs should be allowed for incidental advisory it might be limited to guide proper fund selection to avoid misselling
| Name of entity / person / intermediary/ Organization* | |||
| Sr No. | Pertains to Point No | Suggestions | Rationale |
| 1 | 4.1.3 | Corporate RIA should be allowed to sell (distribute) only Direct plans | Investors might be hit by double charges 1 RIA Fees and 2 Commission Charges paid to Distribution Channel of Corporate RIA. To avoid double expenses on an Investor side. |
| 2 | 4.1.4. c | MFDs should be allowed for incidental advisory limited to guide proper fund selection. | There is a pitfall for Investors that Distributor will give him choices of their own benefits and will act like gift shop sales person, When there is no responsibility mis-selling will be increased. |
Thanking You
Investors Name
Send your Feedback and Query
Email to: sebiria@sebi.gov.in
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