Tuesday, 8 September 2015

Sumit Bose Committee Recommendations

Committee to Recommend Measures for Curbing Mis-selling and Rationalising Distribution Incentives in Financial Products made recommendations on insurance, mutual funds and pension products.

1.Products which have the same function but come under different regulating agencies should be clubbed under single regulatory head. For example, Investment products should be governed by rules set by SEBI.
2.Investment benefits and costs should be clearly specified for the benefit of investor.

3.Disclosures must be made in a manner that makes lay investors understand the impact of costs, early exit, ideal holding period and returns.
4.The markets should have uniform commission structure so that distributors favor all products indiscriminately.
5.Creation of relevant benchmarks by an independent agency to truly reflect the performance of the investor's money
6.Doing away with multiple charges and introducing a unified charge called the expense charge.
7.Punishment for illegal practice of rebating.

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