Bank Rules...

Limitations of SEBI

1. In April/May 1992, the SEBI issued operational guidelines to financial intermediaries i.e., stockbrokers and sub brokers operating on the stock exchange and insist for the registration. This was followed by tussle between the SEBI and the stock booking community over registration related issues and finally assumed rather disturbing dimensions with stockbroker vehemently protesting against SEBI’s authorization approach, trading on all the major stock exchange has remained suspended for serial days may 1992.it is an example of under haste with which SEBI has handled the registration issue. This type of postures of confrontation adopted by SEBI and stockbroker was undesirable. The market reformer, which SEBI desire to introduce, will not be effective with such attitude on the part of SEBI. It will be sad day for the market when SEBI starts dictating that the market should behave the way it deems proper. The Ex-SEBI chief never seems to tri of accusing the stock exchange for the not taking appropriate action against erring broker who are often left free with small penalties which do not deter them for defaulting again. In brief, the way SEBI is going about with its package of reformers for the healthy development of the capital market is not calculated to endear it to the various financial intermediaries it seeks to reform. it is one thing to spell out operational guideline for financial intermediaries but it is a difficult matter when it comes to enforcing them. This demand larger and efficient surveillance machinery fully backed up by administrative capability. Going by the past performance, it appears that SEBI is not different from other bureaucratic organization. Such attitude on the part of SEBI is neither fair not useful for the healthy growth and development of capital market in India. SEBI should encourage self regulation among financial intermediaries so that SEBI is not forced to put restrictions and controls on them. Fortunately, the present approach of SEBI toward financial intermediaries appears to be quite reasonable, positive and constructive.
2. SEBI keeps doling out regularly information about investors’ complaints. When it is good to bring investors’ grievance to public notice, one would like to know what kind of breakthrough SEBI has achieved in the redressed of these grievances. Since an overwhelmingly large percentage of the complaints related to non receipt of refunds allotment letters, dividends on share and interest on debenture these have very little to do with the performance and the function of the stock exchanges. The introduced of “stockinvest” should go a long way in mitigating the evil of non-receipt of refunds.
3. It is a fact that stock exchange in India suffer from many organization, procedural and deficiencies. Reformer are necessary to ensure efficient and healthy functioning f capital markets secondary as well as primary. It is the responsibility of the stock exchange supervisor body to see that all players conduct themselves in a responsible and ethical way. But that needs not call for direct intervention in the market by SEBI. Reforms should be aimed primarily at strengthening the market’s organizational formwork and rectifying infrastructure inadequacies to enable to stock exchange to efficiently cope up with the expanding volume of business. This essence of reform is not given adequate attention and important by SEBI. The attitude of imposing reforms on the stock exchange will not give positive benefits but will lead to new problems and confrontation between SEBI on the one side and other agencies (intermediaries) as well as stock exchange on the other side.
4. SEBI is supposed to protect the interest of investors in capital issues. For year this responsibility was given to the controller if capital issues (CCI). The CCI underpriced every issue, thereby protecting the investor at the expense of the issuer. Recognizing that this discourager many an honest of the issuer from equity issue while pushing several dishonest promoters into the void the government now favors free pricing, SEBI’s discussion note on the subject however confuses its role. Instead of recognized that the free rider problem can only be minimized and not prevented totally in a free pricing environment, SEBI has sought to promote guideline, some if which will, if implemented, return the situation on the day to rigid CCI control. There are many points noted in the guideline but are not clear. Such confusion are undesirable. SEBI is supposed to rectify its guideline and remove such confusions.
5. One of the major criticisms against the SEBI Act was that it did not provide SEBI with sufficient powers it still has not got many of the circle powers. It is seeking including the rights to prosecute or fine. Under the Act SEBI can only recommend action to Government, but it cannot launch direct action against any erring capital market operator. In contrast the securities exchange commission of the US can prosecute and fine anyone on offences ranging from unlawful representation to deliberate misuse of capital market. SEBI should be given power of notification regulation without government approval and prosecute without government sanction.
6. The image of SEBI as a regulator body is not a positive one. To make an impact, regulatory bodies should be well supported by self regulatory organization as regulatory bodies would be ineffective unless they foster institution or self- regulation to help them along.
7. SEBI is not increasingly emerging to be the regulator-par excellence .SEBI intends to share this regulator role through self-regulatory with the co-operation of self regulator bodies like AMBI (Association of Merchant Banker of India) or stock exchange etc. however self regulation is still to find its root among various players of Indian capital market, unlike in USA, UK and other development countries.
8. A year after being given the legal sanctions the SEBI finds itself embroiled in an unending number of controversies. Much of this springs from the week foundation if the low organizational structure on which it is established. Other comes from the strong resistance to change amongst the stock market community, who so far has got way with very little regulation. This situation has affected the smooth working and positive contribution of a SEBI. In fact, SEBI has been facing problem in implementing its directive because the stock exchange and brokers are seeking shelter under the securities contracts (Regulation) Act in Indian companies Act.
9. The moral support offered by the government to SEBI in not very effective. Many of SEBI problem are due to lack of adequate powers given to SEBI. Moreover, SEBI received power on a piecemeal basic and this in the turn reflected in piecemeal guideline. Such piecemeal rendering of power is not useful to SEBI. As a regulator, the SEBI’s image is not good as every announcement of SEBI could be taken to court and eventually changed. This is unfair as what a regulator says should stay. It is necessary to give premier stated of SEBI in regard to regulation of stock exchange by transferring all necessary powers from the company law board and department if company affairs to SEBI. Such consolidation of power will make SEBI a strong regulator agency. It is also necessary to give more autonomy to SEBI and present bureaucratic control on SEBI must be removed.
10. SEBI is a good watchdog. However, it has an adopted practical and cautious approach while introducing reforms in various area under its control. Unfortunately, the top administration of SEBI fails to take into consideration the fact that a lot of education is required to change people. The practice of taking unilateral decision is not proper on the part of SEBI. It should take a decision on the basic of consensus and compressive with unconcerned parties. The ex-chairman of SEBI has rightly pointed out that SEBI’s intention is not to interfere in the corporate sector’s working and capital market but the protect the invest of the investors. This approach indicated positive change on the part of the SEBI. 

PTA

1. Preferential trade agreements
2. lower customs duty on the products originating from the member countries.

FTA

1. Free Trade Agreements
2. It is a special case of PTA where all tariff and non-tariff barriers are abolished
3. free access is allowed to the products of member countries.
4. Example NAFTA (among Mexico, US and Canada).

Customs Union

1. A Customs Union moves beyond a free trade area by establishing a common external tariff on all trade between, members and non-members.
2. Customs Unions typically contain mechanisms to redistribute tariff revenue among members
3. Example: Mercosur

Common Market

1. free flow labour, capital, and output (goods/services) among the members.
2. Example, SICA (in Central America)

Economic union

1. members share a common currency and macro-economic policies (Example European Union).
2. Example, European Union.

HUMAN GENOME PROJECT

The concept of genomics began with the concept of Human Genome Project in the mid 1980s. The $3 billion project-The Human Genome organization (HUGO) was set up in 1990 to co-ordinate the work of scientists in a number of countries-the USA, Japan, UK, France, Germany, Canada, Israel, Russia, Italy and others- in a project to map all of the genes on human chromosomes. The Human Genome Project started on 1st Oct, 1990 in US to map and sequence the complete set of human chromosomes, as well as those of some of the model organisms.

According to a 1986 report submitted by Department of Energy (USA) " The ultimate goal of this initiative is to understand the human genome" and "knowledge" of the human genome is as necessary to the continuing progress of medicine and other health sciences as knowledge of human anatomy has been for the present state of medicine." 

The funding for this project came from the US government through the National Institutes of Health, USA and a UK charity organization, The Wellcome Trust (which funded the Sanger Institute in Great Britain), and some other groups around the world.

The aim of the Human Genome Project was to identify all the genes (approx. 25,000) in human DNA and to determine the sequence of the three billion chemical base pairs that make up human DNA. Efforts were made to create databases to store this information and develop tools to do comprehensive data analysis.

Another important aspect of this project was the decision taken to address the ethical, legal and social issues arising as a outcome of this project. In order to have comparative data, research work was carried out simultaneously on three other organisms namely bacteria- E.Coli, the fruit fly-Drosophila melanogaster, and laboratory mouse.

Another big step forward was the transfer of the technology to the private sector. This approach lead to tremendous progress in the biotechnological field in the later years.

The procedure adopted involved the breaking down of genomes into smaller pieces approximately 150,000 base pairs in length also known as BACs or "bacteria artificial chromosomes". They can be inserted into bacteria where they are copied by the bacterial DNA replication. These pieces are then sequenced separately as a small "shotgun" project and then assembled. The larger (150,000 base pairs) together create chromosomes. This is known as "the Hierarchical shotgun" approach because in this method first the genome is broken into relatively large chunks, which are then mapped to chromosomes before being selected for sequencing.

Every individual has a unique gene sequence therefore the data published by the Human Genome Project does not essentially represent the exact sequence of each and every individual’s genome. The results represent the combined genome of a small number of anonymous donors. In order to have more information about the human genome project, the readers can visit the following web site:www.ornl.gov/techresources/Human_Genome/home.shtml

The Impact of Human Genome Project

After the human genome project the world has changed and it is going to change even more. The Human Genome project is going to impact our lives in a tremendous way. It took 15 years and about 4 billions US dollars to sequence the human genome which was completed in 2003. There are 4 bases in the DNA. A,T, G, C and if we add them up then the total is approx 3 billion. Further, the average gene consists of 3000 bases, and the sizes vary greatly. The largest known human gene is dystrophin about 2.4 million bases. The total number of genes is estimated at around 30,000. Almost all (99.9%) nucleotide bases are exactly the same in all people. So far the functions of over 50% of discovered genes are unknown.  Chromosome 1 has the most genes about 2968, and the Y chromosome has the fewest (231) as chromosome 1 is the longest and Y chromosome is the smallest. The Human Genome Project also revealed that genes appear to be concentrated in random areas along the genome, with vast expanses of non coding DNA between. Stretches of up to 30,000 C and G bases repeating over and over often occur adjacent to gene-rich areas, forming a barrier between the genes and the "junk DNA." These CpG islands are believed to help regulate gene activity. The ratio of germ line (sperm or egg cell) mutations is 2:1 in males v/s females.  Researchers point to several reasons for the higher mutation rate in the male germ line, including the greater number of cell divisions required for sperm formation than for eggs.

The information that was revealed by the Human Genome Project can be used to improve diagnosis of disease. The risk associated with genetic predisposition to diseases can be calculated and based on the results new strategies can be used to treat these diseases such as gene therapy, customized drugs based on individual patients genetic profiles. The information from Human genome Project is also being used in microbial Genomics to detect and treat pathogens, use microorganisms in bio-remediation where environment can be monitored to detect pollution levels and clean up toxic waste. New energy sources as biofuels are also being developed. 

With the help of Genome Sequencing machines, it is now possible to sequence a genome in a record period of time. The human genome is about 3 giga bases and with the present available models of the Genome Sequencing machine, it is possible to sequence 200 giga bases in a week’s time. As far as the price of sequencing is concerned, the price of sequencing a base has already fallen 100 million times. A few years back, it was used to cost $100,000, today it is $1000 and in the coming years it is going to be  $100.

 The world’ s capacity to sequence the human genome is something like 50,000 to 100, 000 human genomes this year. This is based on the present model of the machines available. This is going to double, triple or quadruple year over year. In fact, the Beijing Genomics Institute is far ahead then others with a capacity that is almost 20% of the total genome sequencing capacity of the world. The sequencing of the genes is continuously giving us valuable information regarding human health and treatment of diseases that were difficult to understand and therefore had no cure. The most important being Cancer hitherto still with no cure. It has been possible to correlate the relation between the deletion of TP 53 gene and occurrence of cervical and breast cancer. If there happens to be a deletion mutation in this gene, there is almost 90% chance of getting cancer in these individuals.  If one can get the genetic test done, and if they have the same deletions, the family or the individual can go for regular screenings to catch the cancer early.

There is other very interesting information getting revealed, such as explaining marital infidelity due to the presence of “Cheating genes.” Already there are labs to tests for allele 334 of the AVPR1 gene that is also called “Cheating gene”. This test is being used to find out the compatibility between the couples which in turn will help to lower down the divorce rates and emotional trauma caused due to broken relationships. Arginine vasopressin receptor 1 A (AVPR1A) is one of the three major receptor types, others being AVPR1B and AVPR2, for arginine vasopressin which is present through out the brain, liver, and kidney. Variation in the gene for one of the receptors for the hormone vasopressin is reported to be associated with the bonding of human males with their partners/spouses. It was reported that the 334 allele of a common AVPR1A variation seemed to have negative effects on the men’s relationship with their spouses.

"Our findings are particularly interesting because they show that men who are in a relatively stable relationship of five years of more who have one or two copies of allele 334 appear to be less bonded to their partners than men with other forms of this gene," says Jenae Neiderhiser, Professor of psychology, Penn State. "We also found that the female partners of men with one or two copies of allele 334 reported less affection, consensus and cohesion in the marriage, but interestingly, did not report lower levels of marital satisfaction than women whose male partners had no copies of allele 334." 

The prospect of using the genome as a universal diagnostic is upon us today. Just like other diagnostic tools being used in the hospitals, very soon we are going to have Whole Genome sequencing machines in the pathology labs as routine healthcare tools.

It means is that everybody who is alive today can live an extra 5, 10, 20 years. Very soon, we will have our entire genome copy on a pen drive or on the laptop with an easy access to your personal physician or family doctor. The doctor by looking at your genome can do the risk assessment for you as to which diseases you are prone to due to your genes. This assessment will help the doctor to suggest precautions and preventions and early interventions that will not only ultimately save millions of lives but also increase the life span of individuals.

Beyond Human Genome…….

The International HAP MAP Project

After sequencing the Human Genome, the next goal on which the biotechnologists and researchers are working is to map the SNPs in the entire genome, which is known as “HAP map”. This is a $ 100 M public- private effort, which will take almost 3 years to complete. The project involves collecting DNA samples from the blood samples of researchers from Nigeria, Japan, China and US. The aim is to create the next generation map of the human genome. This information is going to help us understand the .1% (100-99.9) difference that makes humans different from each other. These differences are due to Single Nucleotide Polymorphisms.  By locating the SNPs a Haplotype is created. A Haplotype is a set of single nucleotide polymorphisms (SNPs) on a single chromosome pair that are statistically associated. A Haplotype has also been defined as a combination of alleles (DNA sequence) at adjacent locations on the chromosomes that are transmitted together. A haplotype could be one locus, several loci, or an entire chromosome depending on the number of recombination events that have occurred between a given set of loci. The identification of a few alleles of a haplotype block can identify all other polymorphic sites in its region. This information will help to understand the genetics behind the common diseases.

The findings of the Human genome project, has opened vistas for new fields such as “Systems Biology” which explores life at the ultimate level. The whole organism is taken in to consideration instead of individual components such as single genes or proteins. This novel approach combines DNA sequences with advanced technologies to study how proteins carry out all the activities of a living cell.

Besides this the novel field of Consumer Genetics is going to define the business model and commercial enterprises. Consumer Genetics is now being used to customize personal care and nutritional supplement products. You can get skin care and supplements customized to meet the needs of your DNA. The Life insurance policy is going to be based on your personal genome copy.

One of the other products, fungi, is being also used as a rich source of protein. Since 1960s, a European bread producer spent over $45 million on a fungus that can be formed into acceptable food substitutes and started its commercial production in early 1984. For example a mycoprotein (protein derived from fungi), Fusarium graminearum which is a mold related to mushrooms and truffles. It is odorless and tasteless and contains about 45% protein, and 13% fat with a dietary composition same as beef. This mycoprotein has an amino acid content that is close to that recommended by the Food and Agriculture Organization of the United Nations as “ideal” for human consumption.