| 
IAB asks SEBI to widen mutual fund reach
- The Securities and Exchange Board of India (SEBI) appointed International Advisory Board (IAB) hassaid that there is a need to widen the reach of the mutual fund industry, horizontally and vertically.
- The IAB stressed the need for the mutual funds to offer lifecycle products along with plain vanilla products. It underscored the need to have in place an effective framework for regulation of distributors.
- It also suggested that SEBI might consider encouraging competition in the industry while insisting on transparency and reducing dependence on the existing channels of distribution by enhancing the distribution of mutual fund products through alternative channels such as Internet.
- It advised SEBI to explore the provision of greenshoe option for price stabilisation and independent research coverage of listed companies for a few years post-listing through a common agency.
- After taking note of the practices in some of the Financial Action Task Force (FATF) compliant countries, the IAB advised SEBI to explore risk-based customer due diligence processes without granting any sort of exemptions to any category of investors.
- The IAB took note of the risk management mechanisms in place in the equity and equity derivative segments in India. It advised SEBI on the need to strengthen the legal framework to protect the collaterals of the clients posted with the brokers.As a step towards inter-operability of central counterparties, the IAB advised SEBI to prescribe common standards/ protocol for market participants.
- Among the measures recommended by the IAB are: development of a vibrant corporate bonds market and exploring the introduction of securitized debt instruments and real estate investment trusts with appropriate risk management.
- The role of the IAB will be to guide SEBI and, in doing so, bring in the global experiences and emerging developments and challenges. The IAB will meet twice in a year. Its first meeting was held in New Delhi
Japan leads efforts to insulate Asia from Euro crisis
- Wary of the European debt crisis causing collateral damage all around the world, India, Japan and South Korea are working together to prevent the Eurozone turmoil from spreading to Asia.
- The efforts of the three major Asian economies were shared with the delegates at the World Economic Forum meeting by Japanese Prime Minister Yoshihiko Noda.
