Self-regulatory body for financial advisors

Self-regulatory body for financial advisors

Market watchdog SEBI is likely to consider later this week the
appointment of a self-regulatory organisation (SRO) for financial
advisors like broking houses, financial advisory firms and chartered
accountants.

"In its meeting on August 22 in Mumbai, the SEBI Board is likely to
consider the proposal of SRO for investment advisors. In the second
stage, the government may bring a separate Act in the Parliament for
this purpose," an official source said.

However, SEBI is expected to spare print and electronic media from the
proposed regulations at the moment.

At present, many brokers and sub-brokers who trade in shares,
insurance, banking products or mutual funds also advise investors to
buy or sell these products through various channels, but without any
regulatory control. There have been allegations that some of them
advise to maximise own interests, and not in a professional manner.

"All the investment advisors will have to register with the SRO, and
technically with SEBI also. However, SEBI will not interfere in its
day-to-day functioning," the source said.

The SRO will have representatives from all categories of advisors. It
will have to evolve on its own by drafting a code of conduct to offer
professional advice with a sense of responsibility