Role of RBI and SEBI in the new Wealth Management Industry

Filed under: Uncategorized by Nidhi Singh Leave a comment March 13, 2011

Capital market watchdog SEBI and Banking regulator RBI have been given the responsibility for implementing the regulations governing the one trillion dollar wealth management industry. The government has sought inputs from SEBI, RBI and other financial sector regulators to come up with a comprehensive rule book for wealth management practices. Keeping in consideration the huge size of the wealth industry, it is indisputable that SEBI and RBI shall be having more powers to impose even stricter penalties in the new set of rules. The RBI and SEBI shall be primarily responsible for the implementation of these rules, however it is also the coordinated efforts of other regulators like FMC, IRDA and PFRDA that shall help in achieving the objectives of the rules. The new set of rules as mentioned above is being framed under the aegis of Financial Stability and Development Council (FSDC). This Council is currently being chaired by the Honble Finance Minister of India and was set up in December, 2010 in place of High Level Committee on Financial Markets. There is also a sub-committee to FSDC which very recently met. The meeting was chaired by RBI Chairman D Subbarao and was attended by SEBI Chairman UK Sinha among other regulators. The sub-committee discussed the regulatory issues relating to wealth management and private banking business undertaken by banks.