MUMBAI, Nov 10: Faced with criticism on its proposed norms to check investment advisory practices, Sebi chairman U K Sinha today said the regulator cannot remain silent on unsolicited investment advice and urged the critics to come out with solutions for their protection instead.
Sinha said that the Securities and Exchange Board of India (Sebi) has extended the deadline till November 30 for public comments on the proposed norms to regulate investment advsiors on request from various asset management companies.
Various norms proposed by Sebi under IA regulations, such as mandatory registration of mutual fund distributors giving incidental advice on MF products has met with strong criticism from MF and financial advisory bodies, who contend that the move would be a impediment to growth of the MF industry.
“Lot of comments have been received by us and lot of comments have been made in the media. Many of these comments have taken a very strident position on Sebi’s proposal.
Allegations are being made that Sebi is trying to take away the freedom of speech from people of this country. Sebi is too small to do that,” he said.
Noting that he himself has received stock tips through mobile messages, Sinha, who was addressing the CII financial markets summit here, said, “I am sure similar messages go to thousands of people”.
“So, investors are being misled and Sebi can’t be expected to stay silent on that. Instead of criticising the proposals, I offer you to provide a solution and all suggestions would be received very seriously,” he added.
After its board meeting in September, Sebi proposed to ban unauthorised trading tips through SMSes, WhatsApp, Twitter, Facebook and other social media platforms, as also games, competitions and leagues relating to securities market.
In a detailed consultation paper, Sebi has proposed to ban ‘free trial’ offers by investment advisors for their prospective clients and sought to make it mandatory for even registered research analysts to provide their research reports to all classes of investors at the same time. (PTI)