Regulatory Arbitrage

Posted by: Uma Shashikant on Mon, May 20th, 2013

Regulatory arbitrage occurs when two sets of rules of regulations create a loophole that can be exploited without violating either law. Market players cleverly use such arbitrage in product design and features until these gaps are reduced or removed. Read more

NPS Returns

Posted by: Uma Shashikant on Thu, May 16th, 2013

PFRDA released a press note showing the returns of the various NPS options for the year 2012-13.  The numbers look better than the PF and PPF returns. However, the methodology used to compute returns and the accounting practices are different, making it tough to compare NPS with these traditional products. Read more

SEBI (Investment Advisors) Regulations, 2012 - A Review

Posted by: Uma Shashikant on Mon, Aug 20th, 2012

SEBI (Investment Advisors) Regulations 2012 have been approved by its Board on August 16, 2012. The SEBI press release on Board meeting decisions provides some highlights of these regulations. What are the likely implications for distributors of mutual fund products? Read more

Nurturing Financial Advisors - Part 3 - Don't oversimplify "Investors can and will pay for advice"

Posted by: Uma Shashikant on Sat, May 5th, 2012

The onus of recommending the right product should be on the advisor who should earn the trail commission, while the agent earns a small token commission for his limited role.  As an extension of this principle, the exit load currently charged to the investor can also be collected from the advisor.  Read more

Nurturing Financial Advisors - Part 2 - Why Variable Asset-based Fee is Needed

Posted by: Uma Shashikant on Fri, May 4th, 2012

Reputational capital in advisory business can be built only when assets under advice are evaluated by investors for performance.  This can be fostered only if advisors are able to earn a variable fee for their services. Such variable fees currently go to the distributor. Read more