Sebi Abuse

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It\'s a heart felt voice with logics against SEBI\'s decision to withdraw Entry Loads from MF without any phases.

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Sebi Abuse

  1. 1. SEBI Withdraws Entry Load !! ! ? Why? When? How far it is Justified ?? Lets stand united on this issue for our very own survival !! Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  2. 2. Real life IAS i.e. UPSC Exam 1998 Interview Questions <ul><li>Q. How can you drop a raw egg onto a concrete floor without cracking it? </li></ul><ul><li>A. Concrete floors are very hard to crack! (UPSC Topper) </li></ul><ul><li>Q. If it took eight men ten hours to build a wall, how long would it take four men to build it? </li></ul><ul><li>A. No time at all it is already built. (UPSC 23 Rank Opted for IFS) </li></ul><ul><li>Q. If you had three apples and four oranges in one hand and four apples and three oranges in the other hand, what would you have? </li></ul><ul><li>A. Very large hands.(Good one) (UPSC 11 Rank Opted for IPS) </li></ul><ul><li>Q. How can you lift an elephant with one hand? </li></ul><ul><li>A. It is not a problem, since you will never find an elephant with one hand. (UPSC Rank 14 Opted for IES) </li></ul><ul><li>Q. How can a man go eight days without sleep? </li></ul><ul><li>A. No Problems , He sleeps at night. (UPSC IAS Rank 98) </li></ul><ul><li>SEBI wants MF Distributors </li></ul><ul><li>To see what they them self cant! To understand that they cant ! </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  3. 3. Real life IAS i.e. UPSC Exam 1998 Interview Questions <ul><li>Q. If you throw a red stone into the blue sea what it will become? </li></ul><ul><li>A. It will Wet or Sink as simple as that. (UPSC IAS Rank 2) </li></ul><ul><li>Q. What looks like half apple ? </li></ul><ul><li>A : The other half. (UPSC - IAS Topper ) </li></ul><ul><li>Q. What can you never eat for breakfast ? </li></ul><ul><li>A : Dinner. </li></ul><ul><li>Q. What happened when wheel was invented ? </li></ul><ul><li>A : It caused a revolution. </li></ul><ul><li>Q. Bay of Bengal is in which state? </li></ul><ul><li>A : Liquid (UPSC 33Rank ) </li></ul><ul><li>SEBI wants MF Distributors </li></ul><ul><li>To see what they them self cant! To understand that they cant! </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  4. 4. Something Un Noticed !!! <ul><li>Market has shown such a evolution and tested wits of toughest traders, </li></ul><ul><li>investors and advisors along with Institutions like FII’s, DII’s etc.. </li></ul><ul><li>2007 was a pretty Fearless Bull Mkt </li></ul><ul><li>2008 was a Fearless Bear Mkt with Circuit Breakers Locked on down side. </li></ul><ul><li>2009 1 st Calendar Quarter was a Fearful Bear Mkt. </li></ul><ul><li>2009 2 nd Calendar Quarter is a Fearful Bull Mkt with Budget Session Heading with Circuit Breakers Locked on up side. </li></ul><ul><li>What Happened in this situation? </li></ul><ul><li>Just like a Rat, FII’s ran away with their opportunistic money while markets started sinking down due to global melt down. </li></ul><ul><li>DII’s kept away , sat on cash for a long time along with some AMC’s as well. </li></ul><ul><li>HNI’s booked huge losses almost at the bottom of the pyramid. </li></ul><ul><li>Who stayed invested ? Who made them stay invested ? Of course , these were small retail and HNI’s who invested their money with MFs. We the distributors made them stay there….without being worried of their reaction at the bottom. </li></ul><ul><li>We have been there…We have done that! We are proud of it !! </li></ul><ul><li>We have created value for our selves by showing our sheer professionalism with our good will and fortune at stake . We did a great retention and protected SIP AUM as well. </li></ul><ul><li>This is a bare fact that Media , Regulator, AMC are either ignoring knowingly or have not paid their attention. </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  5. 5. SEBI <ul><li>SEBI argues that it is formed to safeguard the </li></ul><ul><li>Investor’s Interest ! </li></ul><ul><li>SEBI wants transparency in all dealings of participants, But not clear when it comes to it’s own judgement. We have reason to doubt that they have got manipulated SURVEY figures. </li></ul><ul><li>Which Investor complained them about their interest in danger?? If any, have they gone in depth of it??? </li></ul><ul><li>Who gave it right to disgrace the self employed distributor community?? and people employed under them??? </li></ul><ul><li>Government is trying to establish and encourage MF industry, has it established this regulator to discourage and sabotage the same?? </li></ul><ul><li>SEBI has got lot to look into 97.75% rather than 2.25% if it wants to safeguard his interest. There is either a conflict of interest or over observance than needed. </li></ul><ul><li>Where was and is SEBI even today when unknown scripts in stock markets locked in up or down circuits without any reason? </li></ul><ul><li>Is SEBI a knowingly grown COMMUNIST REGULATOR ? </li></ul><ul><li>Let The TIGER be in woods, Let HIM kill WILD BULL if he’s got enough WIT !! </li></ul><ul><li>Let’s not demand HIM being in ZOO for Exhibition. </li></ul><ul><li>But, Let it not come to Village to kill innocent Domestic animals. </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  6. 6. MF Distributors <ul><li>MF Distributors are penalized because of </li></ul><ul><li>rebating and under cutting practice !! </li></ul><ul><li>May I dare to ask a question here. In India which industry doesn't have a discount theory? </li></ul><ul><li>We agree it’s immoral and mal practice to compete unnecessarily; but then, SEBI has to take action to curb these practices. What it has done is not the right idea. </li></ul><ul><li>I t is punishing innocent, small and honest advisors at their own cost. </li></ul><ul><li>There is a saying in Indian Law: Let 100 criminals be free; but there should not be injustice to 1 innocent. Who has to remember this at this particular time?? </li></ul><ul><li>MF Distributors have to collect their earnings </li></ul><ul><li>from their customers as a separate cheque !! </li></ul><ul><li>In India where taxpayers are not ready to give direct taxes honestly; how would you expect them to pay charges to a MF Distributor? </li></ul><ul><li>A small investor is ready to give charges; but what happens if he is starting a SIP of 1000/= </li></ul><ul><li>A HNI is anyways a party to bargain, rather exploit distributor community and let them compete in yet worse manner. </li></ul><ul><li>In all this struggle, one has to keep more qualified staff to look after collection, TDS and ST compliance. This manpower is costing dear and fixed in nature and it will only increase. </li></ul><ul><li>Government it self realises that Indirect Tax are easy and swift way to collect rather than Direct Tax. One can look at history and present for the statistics available on Net and Print media sources. </li></ul><ul><li>It pinches an Indian to pay Direct from pocket as his nature. </li></ul><ul><li>Well this particular prey has already seen enough storms in her child hood. </li></ul><ul><li>Now when after so much survival fights, she is ready to give milk; The Tiger has set his eyes on a full grown with lots of meat and protein prey..there is a question of her survival. </li></ul><ul><li>Surprisingly Villagers have gone on a picnic..there is no one to protect her! </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  7. 7. MF AMC <ul><li>MF AMC’s – Where are they? </li></ul><ul><li>They say they are worst affected party by this move, as they used to distribute the entry load as our commission. Now they will have to set the formulae out of their expense. </li></ul><ul><li>On the other hand they are welcoming this move and congratulating SEBI for this move in front of the media. </li></ul><ul><li>I don’t understand , whether to have equal sympathy as our community or doubt their behavior. </li></ul><ul><li>But, we have to move them. They have to speak out on side of worthy and adversely affected party. </li></ul><ul><li>They are busy making new brokerage structure rather than protesting for our interest. So we have to understand that they have put down their weapons before using them. </li></ul><ul><li>We are heading for 3 options as follows: </li></ul><ul><ul><li>Upfront with no Trail </li></ul></ul><ul><ul><li>No Upfront with High Trail </li></ul></ul><ul><ul><li>Marginal Upfront with Reasonable Trail </li></ul></ul><ul><li>We understand AMC’s mum as majority of AMC’s have got reasonable FDI stake ?? </li></ul><ul><li>So called wise villagers have </li></ul><ul><li>either gone for a picnic showing </li></ul><ul><li>their carelessness or run away </li></ul><ul><li>having scare of the Tiger !! </li></ul><ul><li>They just want milk or the skin of </li></ul><ul><li>the Cow; nothing else. </li></ul><ul><li>They are keeping mum as either </li></ul><ul><li>there is a gloomy benefit or they </li></ul><ul><li>have got nothing to do with this </li></ul><ul><li>issue. </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  8. 8. Brokerage Summary <ul><li>These Segments are Primary Markets in Nature. </li></ul><ul><li>PO Commission Structure </li></ul><ul><ul><li>MPKBY 5 Yr RD 4%, Rest All Schemes 1% </li></ul></ul><ul><li>IPO, Bonds, FD Commission Rates </li></ul><ul><ul><li>Average 1 to 2% </li></ul></ul><ul><li>Insurance Commission Structure </li></ul><ul><ul><li>1 st Yr 8 to 50%, Renewal Commission 1 to 5% </li></ul></ul><ul><li>MF Brokerage Structure </li></ul><ul><ul><li>Upfront 0.5 to 2.5%, Trail 0.25 to 0.75% Annually payable Qly </li></ul></ul><ul><li>These Two segments are Secondary Markets in </li></ul><ul><li>nature. </li></ul><ul><li>Stock Market Brokerage Rates </li></ul><ul><ul><li>Delivery 0.15 to 0.75%, Intraday Trading 0.02 to 0.10% on One side </li></ul></ul><ul><li>Derivatives Brokerage Structure </li></ul><ul><ul><li>Stocks: Delivery 0.02 to 0.10, Intraday 0.02 to 0.05 on One side </li></ul></ul><ul><ul><li>Commodities: Delivery 0.02 to 0.10, Intraday 0.02 to 0.05 on One side </li></ul></ul><ul><ul><li>Forex: Need to mention ??? </li></ul></ul><ul><li>Can any of these tell me following? </li></ul><ul><li>Where are all the beurocrats, economists, active politicians? </li></ul><ul><li>What’s law of economics for costing to that of volumes in a given market situation? </li></ul><ul><li>I have just 2 points to make! </li></ul><ul><li>MF are increasing in size in terms of participants and place and not in volumes! </li></ul><ul><li>Transactions are added to a folio and not traded in multiple churn </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  9. 9. Comparison !! Chhalni Boli Sui Se Tere Pet Mein Ched !! <ul><li>Insurance </li></ul><ul><li>Initial Charges vary from 8 to 50% </li></ul><ul><li>Renewal Commission vary from 1 to 5% </li></ul><ul><li>No Standardization Policy, No Risk Disclosure Norms </li></ul><ul><li>No stringent money laundering policies, cash being accepted </li></ul><ul><li>Less Transparency </li></ul><ul><li>Rebating, Undercutting possible..deep long history as compared to Mutual Fund as robust margin persists </li></ul><ul><li>Mutual Fund </li></ul><ul><li>Initial Charges vary from 0.5 to 2.50% </li></ul><ul><li>Trail Commission vary from 0.25 to 0.75% annually payable qtly </li></ul><ul><li>Complete Standardization Policy, Stringent Risk Disclosure Norms </li></ul><ul><li>Stringent money laundering policies, No Cash </li></ul><ul><li>Complete Transparency </li></ul><ul><li>Rebating, Undercutting possible…not enough depth in margin </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275 Both in Financial Services…yet such a huge regulatory difference!!
  10. 10. Moral ? <ul><li>Mr. SEBI Please hear This!! </li></ul><ul><li>I assume You have read Indian mythology but not understood Indian psychology </li></ul><ul><ul><li>Clients can ask for discount in a SALE </li></ul></ul><ul><ul><li>Clients can caste them self poor or minority caste to avail benefits wherever they want !! </li></ul></ul><ul><li>Mr. SEBI Please keep in Mind!! </li></ul><ul><li>It’s impractical to ask for a separate cheque from client. </li></ul><ul><li>What about Extra office staff, huge technology investment, Extended compliance procedure? </li></ul><ul><li>Hopeful – To be or Not to be!! </li></ul><ul><li>If this voice reaching you, we expect that you shall roll back the announcement completely…as it’s the Just! </li></ul><ul><li>If not than Variable Load Structure would be our next preference. </li></ul><ul><li>If not than, you shall allow 3 options discussed in early slides as last restoration. </li></ul><ul><li>Do we have a prudent regulator? </li></ul><ul><li>Do we have a strong and reliable </li></ul><ul><li>industry lobby to represent our </li></ul><ul><li>interest? </li></ul><ul><li>Do we have a bias and transparent </li></ul><ul><li>justice system? </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275
  11. 11. Justice ?? <ul><li>Why this step motherly treatment in a scam free transparent Industry Vs. other financial markets? </li></ul><ul><li>Are we living in a Democracy ? </li></ul><ul><li>Don’t we have the right to earn, prosper and live a secured life? </li></ul><ul><li>Are we shifting towards COMMUNISM ??? </li></ul><ul><li>Can’t they issue a notification, survey, analyze and then give their judgment or decision ? (Not Manipulated !!!!!) </li></ul><ul><li>This practice is followed in Parliament, unfortunately not in SEBI </li></ul><ul><li>I wonder which is superior power Parliament or SEBI ?? </li></ul>Wednesday, November 11, 2009 18/06/2009 Black Day for MF Industry Bhavesh Vora - SERNET - ARN 35275

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