MF News SEBI appeals to MFDs/RIAs to protect their clients from ponzi schemes

SEBI appeals to MFDs/RIAs to protect their clients from ponzi schemes

G Ram Mohan Rao, Regional Director, SEBI said that there is lot of opportunities for MFDs/RIAs in eastern region.

Nishant Patnaik May 30, 2023

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SEBI’s Regional Director, G Ram Mohan Rao has appealed to intermediaries like mutual fund distributors and registered investment advisors to protect their clients from falling prey to unauthorized schemes. He was speaking at an event organised by eastern India’s MFD association – ICAA.

Rao said that just like Indian army protects our borders from enemies, MFDs/RIAs should protect investors from making investment in illegal schemes.

The Regional Director advised associations like ICAA and MFDs/RIAs to put a grievance redressal mechanism on their websites where people can report about such ponzi schemes. Further, these complaints can be forwarded to SEBI for appropriate action.

Rao further said that eastern region offers a lot of opportunities to MFDs/RIAs. According to him, while the number of MF folios grew by 11% in the last one year, the number of new PANs went up by 13.83% in eastern region. Also, eastern India contributes just 3.7% to the total AUM.

Rao also recommended to MFDs/RIAs to give real life examples to set the right long-term expectation.

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10 Comments

SIPINSURE · 1 year ago `

Dear sir. We are doing it. Agree gold. Kubera. Kanva. In karnataka collected thousands of crores. But our clients and their network not invested. We protected them..we feel proud of that we have done a good job in this segment. Even till today our clients ask before they invest any product and take our concent and go ahead to further. This is what we created trust with them. We never leave our clients to invest in Fake and these Ponzi schemes. Thank you.

Sachin Mehta · 1 year ago `

Here, they expect MFDs to "advice" people, but do not want then to call as Advisors. Someone, Pls represent the case of how much a MFD has to build a business to gain a respectable income in MF distr business, which may take 4-5 years minimum. Competition is ok, but can't investors pay for getting help to achieve their goals? I think they are willing to pay the respectable amount for they receive as value in return. Do investors compare the MF commissions to what they pay for Insurance saving plans?

InvestAir Funds · 1 year ago

Bravo!

Kanad Mehta · 1 year ago `

Where can we report such schemes? I see one happening in my locality. The scheme promises to offer 3% return (pay out) each month and to obtain trust it does distribute post-dated cheques for each month in advance.

The Invest Quotient Financial Services · 1 year ago `

"This was one of the activities which came from the bottom of the heart. At least in my case. I have always cautioned my investors, of the many ongoing scams (the list is endless) and educated them not to fall prey. Many of them call me if they receive any messages or mails enticing them into such scam. Many of my investors will vouch for it. I am absolutely sure many of our brethren, will come out with pride and confirm themselves doing this.
Sir, this has been the cornerstone of our success that we see converted into the ever-increasing faith in the Mutual Fund industry. Even before AMFI could come out with the tagline "Mutual fund sahi hai." It was the work with this unsaid mantra, that brought in the massive wave of informed investors who had experienced the power of SIPs and long-term investing and wealth creation. This was the advice that played big. How can anyone just not notice this or ignore this tremendous contribution to the industry? How can anyone ignore that such advice isn't advisory?

Andrea Rodrigues · 1 year ago `

We aren't IFAs (Independent Financial Advisors) anymore right?

We are MFDs (Mutual Fund Distributors) right?

We aren't allowed to advise clients right?

Direct plans are cheaper and better and being promoted left, right and center.

When TERs are cut, we've got to bear the brunt.

Why do you need us now? To advise?

Mutual Fund · 1 year ago `

ब्रोकरेज भी नही देनी, दुनिया भर के कानून भी लागू कर देना , सारे काम एम एफ डी ही करे तो रेगुलेटरी क्या करेगी ,केवल पंचायत , अभिमन्यु की तरह घेर कर मार डालो एम एफ डी को

Arun Kumar · 1 year ago `

If there is a illegal scheme why sebi did not take not action against the fundhouses...

Vishal Rastogi · 1 year ago `

Hold down ! ...... Why any MFD should do this .... it is not our JOB & that when we are not even paid properly for our good deeds with MF distribution why should we go for this .......!

rakesh popat · 1 year ago `

In my area there is one company known as trade with jazz its offering high roi , and is not sebi registered, many investors are investing lakhs of rupees in its schemes, my question is that how are these companies allowed to collect such huge sums depsite not registered with sebi?

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