The role of a regulator is more like a traffic policeman rather than like an investigative policeman.
The traffic police makes rules:
- only persons above 18 should drive
- a 2 wheeler rider and his pillion should wear a helmet
- signals mean…….
- license application, format, test, etc.
We have had a regulator called SEBI for the capital markets for the past 20 odd years and has done a few things. Could it have been better, was it useful at all are all questions which can be raised till the cows come home.
IRDA’s role also can be questioned…but let us say they at least made the ground rules.
If you switch on the television and watch the Tamil channels – what hits you is the sheer number of ads for real estate sale. The real estate industry has no regulation AT ALL. (Sebi’s role in the IPO of Reliance power and Future Capital Holdings can be questioned perhaps!!!).
When you ‘buy’ a land:
- NOBODY tells you what the builder should show you (there is an offer document, proposal form, etc. when you buy mutual funds or life insurance). It is a different matter that the ordinary ‘investor’ may / MAY NOT read it. It is made available in hard and soft form.
-NOBODY tells you what size of house you are getting.
-RISK of improper title is COMPLETELY on the buyer.
-RISK of how the builder accounts for the advance given by people in his books is subject to the discretion of the seller
Take the education industry. There is such a shortage of students, if you need admission in an Engineering or Medical college, just put your phone number on a site. They will chase you enough, you can negotiate the fees,….
Hey the other regulator we need is an Education Regulator.
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