Page 38 - Banking Finance November 2020

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whereas collecting data required for making the ledger sectors including the financial, manufacturing, energy and
useful, e.g., DNA of livestock animals could be expensive. government sectors. They are also being used in relation to
Sampling can reduce the cost, but it requires that the agriculture supply chains, land registrations and digital IDs.
population of products for data collection is large. This The blockchain technology provides transparency among all
means the average cost of data collection is lower for involved parties and facilitates the collection of reliable data.
larger farms than smaller ones, which raises the concern Blockchain can record every step in a product's value chain,
of increasing the income discrepancy. ranging a product's creation to its death.
Y In order to be successfully implemented, the technology
needs to be plugged into an existing database and The reliable data of the farming process are highly valuable
legacy systems such as enterprise resource planning, for developing data-driven facilities and insurance solutions
warehousing management and manufacturing for making farming smarter and less vulnerable. The
execution systems. Blockchain technology is still in infancy with a few drawbacks
such as lack of or poor infrastructure, failures of
Summary interoperability, limited speed of transactions and other
The blockchain based transactions are being used in many technology issues that would take some time to resolve.

SEBI introduces a code of conduct for fund managers

Market regulator Securities and Exchange Board of India justifications for such decisions and not indulge in any act
(Sebi) has introduced a code of conduct for fund managers which results in artificial window dressing of the net asset
and dealers of AMCs in order to make them more value (NAV).
accountable.
Sebi said dealers will have to ensure that orders are executed
In addition, asset management companies (AMCs) have on the best available terms, taking into account the relevant
been allowed to become self-clearing members to clear and market at the time for transactions of the kind and size
settle trades in the debt segment on behalf of its mutual concerned to achieve the objectives of the scheme and in
fund schemes. the best interest of all the unit holders.
The move comes after Sebi board approved a proposal in Fund managers and dealers will have to ensure that
this regard in September. In a notification dated October investments are made in the interest of the unit holders;
29, Sebi said that chief executive officer (CEO) of the AMC and will act fairly and deal with market participants in a
will be responsible to ensure that the code of conduct is consistent and transparent manner.
followed by fund managers and dealers.
Also, they will have to identify existing or potential conflicts
It, further, said any breach of the code of conduct will be of interest as per their institutions policies and address the
brought to the attention of the board of directors of the same and disclose all interests in securities as required by
AMC and trustees. statutory requirements.
Currently, mutual fund norms require AMCs and trustees to Further, they are not allowed to carry out any transaction
follow a code of conduct. Also, the CEO is entrusted with on behalf of a fund with any counter party who is an
several responsibilities.
associate of the sponsor/AMC/fund manager/dealer/CEO
The fund managers and dealers will abide by the code of "unless such transaction is carried out on arm's length basis
conduct and submit a quarterly self-certification to the on terms and at a price consistent with best execution
trustees that they have complied with the code of conduct standards and at a commission rate no higher than
or list exceptions, if any. customary institutional rates."
Fund managers will have an appropriate and adequate basis They are not supposed to "indulge in any unethical business
for investment decision and will be responsible for activities or professional misconduct involving dishonesty,
investment in the funds managed by them. fraud or deceit or commit any act that could damage the
Further, fund managers will record in writing, the decision reputation of the organisation or the mutual fund industry",
of buying or selling securities together with the detailed the regulator added. (Source: Mint)

38 | 2020 | NOVEMBER | BANKING FINANCE