Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

New regulatory framework for MLMs soon: Moily

Oct 10 2012, 01:03 IST
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SummaryCorporate affairs minister Veerappa Moily on Tuesday said the government will soon come out with rules governing multi-level marketing (MLM) firms

Corporate affairs minister Veerappa Moily on Tuesday said the government will soon come out with rules governing multi-level marketing (MLM) firms, which have been traced to several ponzi schemes across the country.

Moily also added that the investigating arm of the ministry, the Serious Fraud Investigation Office (SFIO) is working on an early warning system to prevent corporate frauds.

“This is part of the ministry’s vision for having enlightened regulations,” Moily said, adding that the analysis wing of SFIO has already come out with many reports and the ministry is acting upon that information.

“We had a close discussion with the department of financial services in the finance ministry. The Act, the Prize Chits and Money Circulation Schemes Act (Banning) 1978, under which these activities can be controlled are under their purview,” corporate affairs secretary Naved Masood said.

Concerned over such companies mushrooming across the country, the ministries of corporate affairs and finance, Sebi, along with the Reserve Bank of India, had earlier met to find a solution.

The MLMs do not fall under the direct jurisdiction of any regulator or department, which has enabled them to thrive.

The helplessness of the regulator was exemplified in the SpeakAsia case, which involved an alleged fraud of Rs 2,000 crore.

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