Sebi has come out with a circular to say what is mis selling and making misselling a fraud. As usual somebody in the ivory tower looking at the battle field with telescope of good intentions.
To me it looks like the Centre’s law against child marriage – the act is old, and the activity is happening. Happiness all around. The Govt and ‘womens’ organisations are happy, the govt is happy and people doing it are happy.
Now let us come to the definition:
“(s) mis-selling of units of a mutual fund scheme;
Explanation.- For the purpose of this clause, “mis-selling” means sale of units of a mutual fund scheme by any person, directly or indirectly, by─
(i) making a false or misleading statement, or
(ii) concealing or omitting material facts of the scheme, or
(iii)concealing the associated risk factors of the scheme, or
(iv) not taking reasonable care to ensure suitability of the scheme to the buyer.”
“The equity market has given 18% p.a. return for the past 40 years..so equities are a good investment”
is it a fair statement? is it mis-selling? Actually it depends on the context in which it was made, does it not?
One bachelor (with a widowed mother who had enough independent income) was sold a life insurance product. I laughed said ‘mis-selling’ The CXO of the company said ‘Subra he is earning Rs. 400,000 a month…he can afford Rs. 25000 a month’ – so this is not mis-selling 🙂
To me the worry is …very few agents even realize that they are mis selling. CIOs who are now busy doing sales calls always keep saying “for the long term equity is good…markets are at attractive levels’..Is that mis selling?
Just too many instances…
I have been mis sold to by hospital services, my daughter’s school, – and these sadly have a far greater consequence.
A friend who is a gynaec said….”Mis-selling in mutual funds…? Who is worried?” The allow abortion pills to be sold across the counter -WITHOUT PRESCRIPTION…The young girls in class 12th or FY have NO clue of the trauma and guilt such a pill can cause….
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