With this tightening of rules surrounding commission with the focus on PMS and AIF. do you think that the kind of complaints that we have seen of aggressive selling in the market, prompted this kind of a move? How is it going to work now?
The regulator has been talking about it for some time now. These cases of miss-selling or whatever are far and few. They are not true representative or reflection of the industry. By and large, the industry is fairly self disciplined. In any industry, you will have some instances where someone would have done aggressive selling or a miss-selling. Having said that, the regulator wants to bring regulations around and that is not a bad idea to improve the selling process and make sure that the investors know exactly what products or funds they are getting into.
When the fund is doing well they end up paying a higher fee and this just aligns the fee structure to performance of the fund in the interest of the client. I think, market forces should be allowed to find its own fee structures because it is a highly competitive industry.
But this is just a conjecture right now. Has there been any official communication from the regulator?
No there has not been but the regulator has been interacting with the industry participants and players have been having discussions to get a feedback and a perspective in terms of sharing their broader thoughts in terms of their thoughts around this. They are certainly looking for it and we will have a consultation paper which will outline the regulators thoughts on it.
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