SEBI clamps down on pesky calls
Tuesday - September 18, 2018 6:38 pm ,
Category : WTN SPECIAL
WTN- To arrest the frequent and obtrusive pesky calls from advisory firms, SEBI, The Securities and Exchange Board of India has taken some strong steps.
The apex banking and securities regulatory body of the country that takes cares of investor interests has ruled that no financial advisory firm can call and disturb elderly and students, luring them to invest in shares. In addition, the board has also ruled against calling housewives and unemployed persons to push them into the share market, even if they cannot afford it.
This injunction comes following a series of complaints with SEBI regarding these firms which keep on nagging and influencing customer propensities and exploit their vulnerability to force them to invest in the share market beyond their means. There are thousands of such financial advisory firms with little credibility and experience in the business trying to rope in gullible customers to put in their hard-earned money in risky ventures. Often the returns are not commensurate with the investment or at times even the invested money is not recovered and this ruins the fortunes of old men and students and such economically fragile and/or uninformed investors.
There are over 200 such firms operating out of Indore alone. They collect hefty sums from the investors in the name of consultancy and assistance to park their funds but they don’t take any responsibility if the investment sinks. Taking cognizance of these facts, SEBI has asked the firms to strictly follow the KYC norms before trying to rope in customers. The risk profiling of the potential investor has mandatorily to be done and a person’s income and paying capacity will have to be taken into account before forwarding any advisory service to him. Also compelling or forcing someone to invest and calling him/her repeatedly for the same is unwarranted.
Strict adherence to KYC compliance will naturally lead to clarity in profiling and understanding of client’s needs and his/her earnings/financial position, according to which investment options can be prepared. This will not only ease the burden on investors but also give them the right idea of how much and where to invest vis-à-vis the risks involved in each of them. The advisory firms need to be more responsible and more sensitive to people’s needs. Instead of compelling them through phone calls, it is always better to suggest them ways to wisely use their money with minimum risks and inform them of the true aspects of the share market. Charging hefty fees for consultancy and not giving service to the full satisfaction of investors is a form of cheating which SEBI cannot allow.
Irresponsible behaviour by these advisory firms have sent many people into depression and affected their family lives due to loss of huge money. SEBI will now act strictly on complaints against pesky firms and even close down such errant companies which don’t abide by the norms. Furthermore, SEBI has also stopped the registration of new companies because it feels, first it is important to check and scrutinise all the profile details before going ahead so that people don’t feel shortchanged.
-Window To News
The apex banking and securities regulatory body of the country that takes cares of investor interests has ruled that no financial advisory firm can call and disturb elderly and students, luring them to invest in shares. In addition, the board has also ruled against calling housewives and unemployed persons to push them into the share market, even if they cannot afford it.
This injunction comes following a series of complaints with SEBI regarding these firms which keep on nagging and influencing customer propensities and exploit their vulnerability to force them to invest in the share market beyond their means. There are thousands of such financial advisory firms with little credibility and experience in the business trying to rope in gullible customers to put in their hard-earned money in risky ventures. Often the returns are not commensurate with the investment or at times even the invested money is not recovered and this ruins the fortunes of old men and students and such economically fragile and/or uninformed investors.
There are over 200 such firms operating out of Indore alone. They collect hefty sums from the investors in the name of consultancy and assistance to park their funds but they don’t take any responsibility if the investment sinks. Taking cognizance of these facts, SEBI has asked the firms to strictly follow the KYC norms before trying to rope in customers. The risk profiling of the potential investor has mandatorily to be done and a person’s income and paying capacity will have to be taken into account before forwarding any advisory service to him. Also compelling or forcing someone to invest and calling him/her repeatedly for the same is unwarranted.
Strict adherence to KYC compliance will naturally lead to clarity in profiling and understanding of client’s needs and his/her earnings/financial position, according to which investment options can be prepared. This will not only ease the burden on investors but also give them the right idea of how much and where to invest vis-à-vis the risks involved in each of them. The advisory firms need to be more responsible and more sensitive to people’s needs. Instead of compelling them through phone calls, it is always better to suggest them ways to wisely use their money with minimum risks and inform them of the true aspects of the share market. Charging hefty fees for consultancy and not giving service to the full satisfaction of investors is a form of cheating which SEBI cannot allow.
Irresponsible behaviour by these advisory firms have sent many people into depression and affected their family lives due to loss of huge money. SEBI will now act strictly on complaints against pesky firms and even close down such errant companies which don’t abide by the norms. Furthermore, SEBI has also stopped the registration of new companies because it feels, first it is important to check and scrutinise all the profile details before going ahead so that people don’t feel shortchanged.
-Window To News
