7/24/2019 In the Name of KYC

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vox populiMagazine forBusiness &Consumers

facebook.com/navhindtimes navhi@navhindtimesnavhindtimes.comThe Navhind TimesIMonday November 16, 2015

From November 1 2015 all non-individual investorsneed toprovideUltimate Beneficial Ownership (UBO) details at the time of account op

BY TENSING RODRIGUES

Many crimes have been commit-ted, and continue to be commit-ted in the name God. And manycrimes happen to be committed inthe name of good. Oh no, I am not

straying into the politically right debate cur-rently raging on tolerance and intolerance. I amconcerned about another good about which nodebate seems to be politically right: The goodof the investors specifically the good of theinvestors in mutual fund schemes.

Since times immemorial SEBI has beentrying to protect the interest of MF investorsby issuing fatwas after fatwas apparently to

no avail. Of course, some of these fatwas havea reverse motive of protecting the countrysfinancial system from rampages by MF inves-tors. Poor SEBI has to fight off enemies on theleft and right leaving it little time to fight theenemy within.

Probably one of the earliest diktat thatAMFI/SEBI devised was the KYC Know YourCustomer. The MF companies had to knowtheir customer in the sense of ensuring thatthe money that they invest comes from whitesources. Fine. It made a lot of sense. But ap-parently that was not fool-proof since it did letsome tainted money in. So SEBI added somemore entries to the KYC form and called for a

repeat of the exercise. And kept repeating itagain and again.

From November 1 2015 all non-individualinvestors need to provide Ultimate BeneficialOwnership (UBO) details at the time of accountopening. And all investors need to provideinformation such as income details, occupa-tion, net worth, etc. Why ? Why the hell shouldthe receiver of funds or even the securitiesregulator know my income details, occupa-

tion and networth ? Thatis the domainof the IncomeTax Depart-ment or theDirectorate ofRevenue intel-ligence.

If ITD orDRI ask forsuch informa-tion, it makessome sense,because it istheir duty to

prevent tax evasion or build up of undeclaredassets. And they do their duty quite well. Butthe securities regulator or the asset managershave no business to ask for my income detailsor net worth. This is clearly tresspassing intothe privacy of the individual. Do not be sur-prised if the next addition to the KYC form isdetails of the size and brand of the investorsinnerwear.

If you have not still seen through themischief let truth be told. SEBI and AMFI arecollecting this information on behalf of taxauthorities. Since years ago information onMF purchases by investors has been regulalrlyprovided to ITD by MFs through their annual

returns. And wherever the ITD saw purchasesin excess of Rs. 2 lakhs, it has been sending no-tices to the investors asking for explanation.

Nothing wrong with that. But why col-lect information by underhand means? Makeit obligatory for every investor to file normalIT returns providing all this information. Leteverything be above the table the investorsdoings and the ITDs doings. This chupa-chupiis bound to breed corruption. Probably it is.

The crucial element in this whis to create an unique identity thaenough to withstand most of the so that all the transactions of a giare tagged to that identity. Then need to chase the illegalities. Justnumber and the full history will bthe computer screen. Absolute tragood for the investor and for theBut somehow, we seem to fight s

We have a PAN number. But large number of investors who doPAN. And there are some who haone. So the whole purpose of PANThen we came with AADHAR. Onment introduced it and the next d

and then reintroduced it and thenary rubbished it. Why cant the prealise that an unique identity is transparent financial system. Pernot want it because it will leave ncorruption.

*The author is an investment co

Readers can send their comments

to investment.ideas.shop@gmail.

In the name of KYC

BY ADV JATIN RAMAIYA

It is a law settled by now thataccess to Consumer Court isonly for a consumer as definedby the Consumer Protection Act,which means that if any person

had obtained any service or prod-uct for any commercial purpose

or profiteering then the roads tothe Consumer Court are closed tothem.

The Goa State Consumer Com-mission Justice in its numerousjudgments is pointed out that con-sumer courts are one way streets.However the law on how such pleaof ouster of jurisdiction or lack ofjurisdiction has to be raised andwhen such plea should be raisedwas unclear.

his livelihood.The Commission whilst dis-

posing the appeal observed thatadmittedly the complainant (Gawas)is a businessman with business ofgiving his trucks on hire. Howeverhe had purchased the vehicle inquestion to be used in connectionwith the business of giving his

trucks on hire. In other words tosupervise his business and there-fore for a commercial activity. Itwas certainly not for the purposeof earning his livelihood by meansof self-employment.

A similar view was taken ina previous appeal wherein theCommission observed that confer-ment of jurisdiction is a legislativefunction and if the court passes adecree having no jurisdiction over

State commission

defines consumer