SEBI to abide by newly changed govt. norms' in ULIP controversy

Mumbai, June 23 (ANI): Chairman of the Securities and Exchange Board of India (SEBI) Chandrashekhar Bhaskar Bhave has said that they would abide by the newly changed government norms in the Unit Linked Insurance Plans (ULIPs) controversy.

Speaking at the Confederation of Indian Industries Mutual Fund Summit here on Wednesday Bhave sought to clear the air on the Unit Linked Insurance Plans or Products (ULIPs).

In a statement released over the weekend, the government of India had modified the definition of ULIPs as being part of a mutual fund or security scheme, and classified it under the 'Life Insurance Business', thereby bringing it under the overview of the IRDA (Insurance Regulatory and Development Authority).

Rubbishing reports of a proxy 'war' between the government and SEBI over the ULIPs case, Bhave said that the regulatory body would abide by the newly changed laws related to the case.

"The first thing is that the media description of a 'war' is something I don't agree with. Another thing is that we all operate under law, as it exists. Since the law has changed now, we will operate under that now," said Bhave.

Bringing further relief to investors, Bhave promised that the banned and tainted stockbroker, Ketan Parekh, was under the SEBI scanner and that all his actions were under surveillance.

"See, we do not discuss individual cases. Things are only put in the public domain once the investigation is over. However, let me assure you that the case is under the surveillance of the SEBI and that the culprit is under our scanner," added Bhave.

Meanwhile, highlighting the need of the government to examine the role of the Association of Mutual Funds in India (AMFI) and SEBI, Bhave proposed that AMFI must explore a self-regulatory role for the mutual fund industry by giving a policy paper on mutual funds to the SEBI and the government.

He added that the mutual fund industry needed to streamline its product offerings and come up with proposals for a common policy on how to govern the industry.

SEBI banned entry fee charged by mutual funds from last August, limiting their ability to pay distributors and raise assets.

The mutual funds industry currently gets 74 percent of its business from the top ten cities in India. (ANI)