So there was a lot of drama after the recent IRDA-SEBI fight, which went all the way to Finance Secretary Ashok Chawla, and the FM Pranab Mukherjee announced that “there will be status quo” until a court determines who has the right to regulate what.
This is strange, no? A government that has the right to clarify right then and there, is asking regulators to go to court to determine their turf. All Pranab-da has to do is say “IRDA, shut the hell up” and make necessary notifications. Why the tail between the legs?
Oh, Pranab Mukherjee says he would like to see no-loads on all financial products. This is great and hopefully the SEBI-IRDA row will resolve to the point where ULIPs come entry-load-free.
SEBI hit back – the “status quo” only applies to current ULIPs, it said in an order today. New ULIPs will not be allowed.se
2. In terms of para 26 of the said [earlier] order, 14 entities have been restrained from issuing any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new and/or additional subscription for any product (including ULIPs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI. As per para 28 of the said order, the order shall come into force with immediate effect, i.e. from 09.04.10.
3. This is to bring to the notice of investors that SEBI has decided to keep in abeyance, till further notice, the enforcement of the above directions with respect to the ULIP schemes /products existing on the date of the order, i.e. 09.04.10. However, with respect to any new ULIP schemes / products launched after 09.04.10, the directions mentioned in the said order will be enforced as indicated therein.
4. The aforesaid 14 entities have been informed of the above decision separately.
Awesome. The fight is about commissions really – SEBI wants to make it an even playing field for everyone and IRDA cares only about their stupid industry who have fattened themselves on investors money and can’t think about how badly investors are scammed by ULIPs.
Go, SEBI. It’s going to be tough, but I hope you win this battle.
