No upfront commission for selling financial products, says panel

A committee headed by former finance secretary Sumit Bose for rationalising distribution incentives in financial products and curbing mis-selling of such products, has come out with its recommendations. These include similar tax breaks for similar products, abolition of upfront commissions, and giving customers the choice to exit from an investment, etc. The panel called for uniformity of regulation of financial products by various bodies such as the Securities and Exchange Board of India, Pension Fund Regulatory Development Authority, and Insurance Regulatory Development Authority. It also said the grievance mechanism for customers should be strengthened.

"There is an urgent need to bring distributors, their sales employees and sub brokers under a regulatory framework. All distributors, across regulators, along with their sales employees, should be assigned a unique number so that monitoring, surveillance and enforcement becomes unified and simpler," the committee said.

The members of the committee, set up in November 2014, included National Stock Exchange chairman S B Mathur; SBI Capital Markets managing director S Vishwanathan; and Manoj Joshi, joint secretary in charge of capital markets in the finance ministry.