Finra fined and censured a New Jersey broker-dealer called Network 1 Financial Securities for failing to establish procedures to identify and address excessive trading by clients, in violation of Regulation Best Interest. This resulted in over $533,500 in commissions for the firm. The chief compliance officer Michael Molinaro was also suspended for 3 months and fined for these violations. While Molinaro took steps to comply with regulations, Finra found he did not properly manage the risks of excessive trading. This case shows Finra is starting to enforce the compliance obligations of Reg BI, including requiring broker-dealers to have supervisory procedures to monitor recommendations.
The author discusses how startups can break through the noise of the internet by taking risks, continuously improving their product, and creating new categories. Their company successfully launched a spin-off AI writing app despite fears of subscriber loss. The author argues that on the internet, bold actions are necessary to gain attention since people are too distracted by their own concerns to notice modest changes. To succeed, companies must make customers extremely happy with their product or service, ship improvements rapidly, and invent novel concepts that capture people’s imagination. By understanding that most changes attract little scrutiny, entrepreneurs have the freedom to try innovative ideas and build remarkable things.
The National Pension System in India has reached a significant milestone, with its assets under management AUM surpassing Rs. 10 lakh crore as of August 2022. This was driven by growth in corporate enrollment in NPS and the addition of 1 million new subscribers to the Corporate and All Citizen models. The NPS AUM has more than doubled from Rs. 5 lakh crore to Rs. 10 lakh crore in just 2 years and 10 months. Strong market returns have contributed to this phenomenal growth in AUM. Going forward, the PFRDA plans to introduce a new Systematic Withdrawal Plan feature to NPS to provide more flexibility to subscribers post-retirement.
In India, a growing number of credit card users have found ways to exploit rewards programs and loopholes to earn cashback and points. Some individuals even run lucrative businesses, helping other cardholders maximize their benefits. One man earns over $1,200 per month by processing credit card transactions through point-of-sale machines and splitting the rewards with clients. Banks are struggling to curb these practices and have hired more staff to monitor accounts and close loopholes. The article highlights how some people have turned credit card hacking into a profitable side business.
Reliance Jio is launching a new financial services business called Jio Financial Services that could disrupt India’s financial industry. Jio Financial Services will leverage Reliance’s large retail business and Jio’s vast customer base. This poses a major threat to established non-banking financial companies like Bajaj Finance, which currently dominates the market. Jio Financial Services also has a significant capital advantage and could gain an early edge through its partnerships with companies like BlackRock. The entry of Jio Financial Services is expected to intensify competition in consumer financing and other financial sectors in India.
Stable Money is a fintech startup that aims to make fixed deposits more accessible by allowing users to invest in FDs from multiple banks through a single platform. Within 20 days of launching, the platform had over 20,000 customers who had invested over Rs. 10 crore in FDs. The founders believe fixed deposits are the best mass product for Indians, as surveys show they are still the most searched investment option. While FDs are seen as boring, interest rates are currently high at up to 9%, making them attractive. Stable Money hopes to partner with 25 financial institutions by the end of next year to offer more FD options to users.