FOR HEAVEN’S SAKE THIS IS A HUMOR COLUMN AND A DIG ON THE RECENT REGULATIONS!
These are the forthcoming Financial Services Legislation:
1. Distributors of financial products cannot do advisory: Every person in the financial services business will choose whether to be a distributor or an adviser. The adviser will act like a doctor and charge a fee, the distributor will dispense the product like a chemist.
The adviser will have a net worth of Rs. 500 crores (this has been done in consultation with RBI) and since the distributor does not really stock any products, he can have a net worth of JUST Rs. 100 crores.
2. To be an adviser (in individual capacity) he will have to be a CA, or an MBA from a prime institute. Prime institutes will soon be notified.
3. Distributors will have to invest at least 1% of their Net worth in Open ended schemes subject to a minimum of Rs. 30 lakhs in schemes that they distribute.
4. Advisers must have a good reach – of say at least 100 branches and distributors should have at least 500 branches.
5. Online sales of mutual funds will be stopped IMMEDIATELY – they are violating the spirit of opening branches. See our top 2 PSU mutual funds brilliant branch expansion strategy.
6. All mutual fund houses should have at least 1000 branches in India of which at least 799 should be in NON URBAN areas.
7. TDS will be applicable on commissions, rebates, schemes, picnics, lunches, booze, etc. if it is provided by the AMC to the distributor.
8. When a meeting of the distributors is called all the 114 of them should be invited. We should also ask them why the fall in IFAs has been so drastic.
9. We are at a loss to understand why Srikanth joined Goldman Sachs as Director (Asia Pac) Distribution. Sad for Indian Financial Industry. BharatFunds is now a 100% subsidiary of GS. We should encourage Indians to be in the business of mutual fund distribution.
10. These laws will be applicable to all the 4 Asset Management Companies, 114 distributors and the 244.712 bank branches selling mutual funds. And of course all the 1,000,324 bank employees who are authorized to sell.
…more to follow….strictly confidential press release…
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