Regulators to tame wealth managers

When asked if there was any consensus on who should regulate the wealth management space,Agarwal replied in the negative adding that the FSDC does not come to a conclusion “quickly”.

The wealth management space,which involves rendering investment services to high networth clients against a fee,does not have a specific regulator presently and its activities fall under the gaze of multiple watchdogs like capital markets regulator SEBI,insurance regulator IRDA and the RBI in the present scenario.

Following number of allegations of mis-selling and duping clients as in the recent instances involving executives of a couple of multinational banks,demands are being voiced to regulate the sector better. But it is not clear as to who will regulate the sector.

Agarwal said the FSDC meeting,which was attended by Chief Economic Adviser to the PM Kaushik Basu,SEBI chairman U K Sinha,Department of Economic Affairs Secretary R Gopalan and Department of Financial Services Secretary Shashikant Sharma,also discussed ways to assuage concerns of the foreign investors in the proposed infrastructure debt fund.

“We were discussing what are the pros and cons of various approaches…What should be the structures so as to satisfy the foreign investors were discussed,” he said,clarifying that nothing is final yet and the Ministry of Finance is working on the guidelines.

In his budget speech,Finance Minister Pranab Mukherjee had announced the government’s intention to facilitate establishment of the dedicated infrastructure funds through SPVs for attracting investments into the infra sector.

According to the estimates of the 12th plan,investments of up to USD 1-trillion will be required for catering to the needs.

Gopalan yesterday said that the government will be finalising the guidelines for infra debt funds by end June.