Single regulator needed to monitor collective investment schemes: SEBI

India Infoline News Service | Mumbai |

UK Sinha said that there should be one single regulator for all collective investment schemes, nidhi funds and chit funds. This regulator will have a very serious task at hand

Capital market regulator SEBI (Securities and Exchange Board of India) on Wednesday said there is a need for a single, separate regulator to monitor collective investment schemes (CIS).

According to SEBI’s estimates, promoters of CIS schemes have raised more than Rs. 100 billion by promising investors quick, massive returns.

Speaking at a seminar of Asia Pacific Region Committee (APRC) of IOSCO in New Delhi, SEBI chairman UK Sinha said, there should be one single regulator for all collective investment schemes, nidhi funds and chit funds. This regulator will have a very serious task at hand.

Mr Sinha said that he and his colleagues are working hard to ensure that small investors’ savings are not put to risk.

Last month, SEBI ordered Kolkata-based Saradha Realty India to close all its collective schemes and refund the money collected from investors within three months. The regulator also barred the firm’s managing director Sudipta Sen from the securities markets till the time it wound up all its CIS and refunds the entire money.

SEBI has also proposed some amendments to the SEBI Act. “For instance: whenever we impose penalties for some people those penalty, we find it extremely difficult to collect because the collection mechanism under SEBI Act is vastly different and inferior from the mechanism, for example, given under I-T Act of CCI Act,”  Mr Sinha said.
The three day APRC meeting—April 29-May 01, 2013—aimed at further enhancing mutual cooperation, exchange of information and highlighting common issues of concern amongst the securities market regulators of the Asia-Pacific region, one of the fastest growing regions of the world.

IOSCO is the leading international policy forum for securities regulators and is recognized as the global standard setter for securities regulation. The organization's membership regulates more than 95% of the world's securities markets in 115 jurisdictions and it continues to expand.

APRC is one of four regional committees constituted by the IOSCO to focus on regional issues relating to securities regulation. The APRC comprises 25 members representing securities regulators from the Asia-Pacific jurisdictions.


 

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