ethics audit presentation
TRANSCRIPT
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ETHICS AUDIT
PRESENTED BY ~DEBADARSHI ROY (10DM074)
RAHUL MISHRA (10DM078)
ASHIS KUMAR DAS (10DM079)
ANIMESH GHOSAL (10DM081)
BARCELONA KHUNTIA (10DM082)
ABHIPSA PATTNAYAK (10DM091)
SANJEEV KUMAR (10DM093)
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What is Value?
• It is the basic conviction that a specificmode of conduct or end-state of existenceis personally/socially preferable of an
opposite or converse mode of conduct orend state of existence.
• Values are long-lasting beliefs; evaluativestandards that helps us define what is
right or wrong, good or bad in the world.
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VALUES @ A GLANCE
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Loyalty to the Organization:
• Being motivated yourself-Your ownenthusiasm and commitment is contagious
• Pursuing total integrity as a core value of the organization and central to the
delivery of community policing• Setting challenging, realistic goals and
objectives• Improving the communication process at
all levels is critical• Treating each person as an individual and
recognizing their respective skills
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ETHICS AXIS
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DISTRIBUTION
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ETHICS MODEL
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PURPOSE• Identify pertinent ethical issues in their practice settings. What
specific ethical risks do social workers face? Are there ethicalissues that arise in the work that are unique to the client population,
treatment approach, setting, program design, or staffing pattern?
• Review and assess the adequacy of their current practices. Has thepractice setting addressed compelling ethical issues? How adequateare the current practices, policies, and procedures? What issuesneed to be addressed?
• Design a practical strategy to modify current practices as needed.What steps does the agency or practice need to take to protectclients, prevent disgruntled parties from filing ethics complaintswith state licensing boards and professional organizations, andprevent ethics-related lawsuits? Who in the practice or agencyshould work to address these issues? What resources will theyneed? What timetable should they follow?
• Monitor the implementation of this quality assurance strategy. Howcan practitioners ensure that the implementation plan has beenimplemented effectively? What indicators can staff members use toassess the extent to which the audit goals have been met?
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STEPS FOR ETHICS AUDIT
Appoint staff members
Identify ethics related issues
Collect information regarding issue
Identify the risk level
Utilize the findings by taking necessarysteps
Identify a staff to monitor the
implementationDocument the complete audit process
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What is Mutual Fund ?
A Mutual Fund is a trust that poolsthe savings of a number of investors who share a commonfinancial goal. The money thuscollected is then invested in capital
market instruments such as shares,debentures and other securities.The income earned through theseinvestments and the capitalappreciation realized are shared byits unit holders in proportion to thenumber of units owned by them.
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How mutual fund works:
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Brief History of Mutual Fund
First Phase – 1964-87
Second Phase – 1987-1993 (Entry of Public Sector Funds)
Third Phase – 1993-2003 (Entry of Private Sector Funds)
Fourth Phase – since February 2003
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F i t it
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Frau s associate witMutual Fund
• Churning \ Excessive trading: Churning refers to the excessive
buying and selling of securities by a broker for the purpose of generating commissions and or fees and without regard to
investors’ investment objectives.
• Fraudulent Material Misrepresentation : The broker falsified
fact(s) about an investment. If investor had known the truth
he would not have agreed to purchase the investment.
• Front Running: A stock broker buys or sells securities for their
own account before executing orders previously submitted by
their customers. After the broker has filled his client’s orders,
the broker closes out their position at a profit based on the
new price level created the buying or selling of the clients
orders.
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• Fraudulent Material Omissions: The broker failed to inform
you of facts concerning an investment. If you had known
these facts you would not have agreed to purchase the
investment.• Unsuitable Recommendations: Brokers have an obligation
to learn their client’s financial needs, objectives and
circumstances before recommending an
investment. Unsuitable recommendations occur when thebroker recommends an investment inconsistent with the
client’s financial needs, circumstances and objectives.
• Failure to Follow Instructions: The broker is instructed to
buy or sell a security or follow a particular investment
strategy. The broker ignores the instructions and does
nothing or buys something else entirely.
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• Unauthorized Trading: The broker buys or sells
securities without written or verbal permission.
Mutual Fund Abuses including, Mutual fundchurning, Mutual Fund switching and Break point
Selling.
• Fraudulent Asset Transfers: A brokerage firm
operates under one name and incurs significantdebts, liabilities and lawsuits. When the firm reaches
a point they have to liquidate assets to pay their
liabilities they close their doors and transfer the
assets to a newly created firm with a different
name. Both firms will have the same employees and
principals.
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• Break Point Selling: Mutual fund fraud arises whenbrokers, in order to maximize their commissions,recommend fund purchases at just below the break point
or fail to recommend a suitable share class given thelength of time a client anticipates holding the fund or sellsa share class that is inconsistent with the client’s objectives. Unscrupulous brokers maximize theircommissions by failing to inform the client of the variousmethods commissions and expenses can be reduced.
• Negligence: Broker’s have a duty of care to be reasonablydiligent and prudent in the handling of clientaccounts Negligence occurs when the broker failed in his
duty to be reasonably diligent or prudent and did not actas a reasonable and prudent broker would have acted inthe same situation.
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Aftermath of being unethical
CRB Group of Companies :1996 scam known as
CRB scam: Chain Roop Bhansali was charged
with Fraud, Cheating and Siphoning off of funds
from SBI.
Amount of Fraud:
` 12 Billion
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AMFI
• Association of mutual fund in India wasestablished on 22 august 1995.
• It is the apex body of all assetmanagement companies which are
registered with SEBI.• It follows the principle of both protecting
and promoting the interest of mutualfunds as well as their unit holders.
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OBJECTIVE OF AMFI• It maintains high professional and ethical
standard.• It sets the code of conduct• Interacts with SEBI and work according to
SEBI guidelines
• It develops a trained agent distributor• It promotes proper understanding of
mutual funds• It disseminate information on mutual fund
industry
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CODE OF ETHICS BY AMFI
• Integrity (honesty)• Due diligence• Disclosure
• Professional selling practices• Investment practices• Operations• Reporting practices
• Unfair competition• Observance of statutes, rules and
regulation• enforcement
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• Net worth of ` 7,911 crore
• It sponsored by Kotak Mahindra bank ltd.
• Employs around 20,000 employees
• Has a distribution network of 1,716branches, in India and Abroad.
• Has over 10 Lac investors in various
schemes
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Cases
• Case 01• Kotak Mutual fund ,Somajiguda Branch –
have wrongly issued statement ( SavingA/c No 05520110010797. Investment a/c
no. 502496, CRN no. 11919591).
• Case 02
• KOTAK Mutual FUND/KOTAK MIDCAP – Regarding non credit of amount.
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HDFC Asset Management Company Ltd (AMC) was
incorporated under the Companies Act, 1956, on
December 10, 1999.
Average Asset under Management:`
93,105.58 Crs.No. of investors: 41,98,994
No. of ARN certified distributors - 32,570
(As on Sep 30,2010)
Market share 11.8%
No of complaints received 7763 (in 2009).
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HDFC Mutual FundCase-1
Front Running Case
• Loss to HDFC mutual fund customers `2.38cr
• Nilesh Kapadia (Ass. Vice President) revealed advanced
information to other market participants
Case - 2
Redemption delayed
• Mr Mitesh Sampat give the redemption request on 2nd Jan,2009
• HDFC Mutual Fund does not want to compensate him for
delayed payment
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• UTI Mutual Fund started in January 14,2003 .
• It has a nationwide network consisting
148 UTI Financial Centres (UFCs)• UTIAMC presently manages a corpus of
over ` 65,38,724.42 lakhs as on 31st
December 2010 (source:www.amfiindia.com)
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UTI Mutual Fund
Cases:
• A person named as Tulika Saikia,Mumbai.
He had applied for redemption of all units for his UTI Growth and ValueFund on 21st January, 2008.
Till April his redemption was not made.
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• According to economic bureau report onDec. 2010, SEBI is upset over thecomplaints against some of the leading
mutual fund players.• According to Amfi records, 39 mutual
fund houses have more than 4.5 lakhcomplaints against them.
• UTI Mutual Fund, tops the list with99,347 such issues. The country'soldest fund house has received more
than 30,900 complaints (22 per cent of the total)relating to non-receipt of dividends and another 16,700 markingnon-receipt of statement of accounts
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CORPORATE SOCIALRESPONSIBILITY
Kotak Mahindra views Corporate Social Responsibility as an investment in society and in itsown future. Kotak uses the power of its human and financial capital to help in transforming communities
into vibrant, desirable places for people to live. Thegroup leverages its core competencies in threeareas:
• Sustainability
• Economic Development
• Doing My Bit
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Awards
• Outlook Money NDTV Profit Awards, 2009
• ICRA Awards, 2006 & 2009
• NDTV Awards, 2006
• LIPPER FUND Awards, 2006
• CRISIL BEST FUND Award 2003
• OUTLOOK MONEY BEST WEALTH CREATOR
DEBT 2003
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C i l
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Corporate socialresponsibility
• ‘ensuring children learn’ and the ‘girl child’ projects, the bank has assisted in setting up a learning resource
center ‘LRC’ at a shelter home for street boys.
• The LRC houses a bank of materials,
books, teaching and learning aidsand aims to help expand the skill sets of underprivileged students.
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HDFC Mutual Fund to launchcancer fund of `10 crore
• HDFC Mutual Fund, the country's second largest fund house by assets under management, with active participation from Indian Cancer Society (ICS) and some noted oncologists in the city, will launch a 3-year close-ended debt fund, christened HDFC Debt Fund for Cancer Cure
• The initial corpus will be invested into low-risk debt instruments in such a way that the initial capital will be fully protected.
• The dividend income that it would generate over its3-year tenure, could be passed on to ICS, where aboard of trustees will decide how to spend that
money to help those cancer patients who need themthe most.• Investors will have the option to either donate the
full dividend or half of it, and at the initial investment will be returned to them at the end of the third year.
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AWARDS• HDFC Mutual Fund was the Winner of "India
Equity Fund House" Award (from amongst 9 fundhouses) for the one year period ending December31, 2009 at the Morningstar Fund Awards (India)
2009.• HDFC Cash Management Fund - TreasuryAdvantage Plan - Growth Option was the runnerup in the India Open-Ended Ultrashort Bondcategory (from amongst 28 schemes) for the one
year period ending December 31, 2009 atMorningstar Fund Awards (India) 2009.
• Prashant Jain of HDFC won the award for the bestequity fund manager
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CORPORATE SOCIAL RESPONSIBILITY
•One in every 6 people over the age of 60 in theworld lives in India.
•The aged of today have no choice but to
depend on their own lifetime savings to survivefor nearly 20 years if they stop working at age60.
•We are likely to have nearly 20 crore elderly inIndia within the next 2 decades.
•Of the 36 crore paid workers in India today,only 11% belong to the organised sector.
Details of Micropension
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Details of MicropensionInitiative
Arrangement with:
• Union Bank of India,
• The Bihar State Co-operative Milk
Producers’ Federation Ltd.(COMPFED),Paradeep Port and Dock Mazdoor Union,
• Bank of India,
• Shree Mahila Sewa Sahakari Bank Ltd.and
• Self-Help Promotion for Health and Rural Development (SHEPHERD)
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'Swatantra'
• UTI Mutual Fund announced their tie-upwith HDFC Bank for its InvestorEducation Initiative called "Swatantra" inthe states of Kerala, Karnataka andTamil Nadu.
• This initiative aims at creating investorawareness about different financialproducts and wealth creation options.
• Innovative formats will be used forcommunicating about financial productslike mobile banking, web campaigns,face book, twitter, financial calculatorsand planners.
AWARDS
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AWARDS• Second time in a row, UTI Mutual Fund has been
awarded the „Most Investor-Friendly Fund House of the Year‟ by CNBC-TV18-CRISIL Mutual Fund Awards
2011.• Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI
AMC 's CMO has won “MYKM Stars of Industry YouthIcon Award” from 94.3 Radio FM.
• UTI Dividend Yield Fund has been adjudged the TheBest Large Cap Fund by Morningstar Fund Awards(India) -2011.
• UTI Equity Fund has been adjudged The runner-up forthe Best Large Cap Fund by Morningstar Fund Awards(India)-2011.
• UTI AMC has won the Golden Peacock InnovationAward 2011 for its Investor Education initiative „Swatantra‟.
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Suggestion:
• Technology
• To have an Ombudsman for Investors‟ grievances
• Regulators should do an audit at regularinterval to check the source of AUM