Mumbai: For hundreds of analysts working at bond and equity brokerages across India, the US chartered financial analyst (CFA) qualification is a badge that tells the world that they are as good as their counterparts on Wall Street.
This year, more than 10,500 Indians had registered for the programme. Their plans to become CFAs, however, will have to wait.
The All India Council for Technical Education (AICTE), India’s technical education regulator, has ordered the CFA Institute “to cease operations in India”. AICTE’s order is the latest chapter in an ongoing fight between the CFA Institute and the Hyderabad-based Institute of Chartered Financial Analysts of India (Icfai) over the use of the terms—CFA and chartered financial analyst. Kalpesh Parekh, head, sales, ASK Securities Pvt. Ltd, says, half the firm’s 18-strong equity research team is currently on leave to take the CFA exam.
Tejas Sheth, an equity analyst with Mumbai-based brokerage Darashaw and Co. Pvt. Ltd was preparing for the exam, too. He said he would consider appearing for it in centres outside India.
The institute has offered candidates the option of taking the exam in locations close to India including those in Sri Lanka, Thailand, Hong Kong and the United Arab Emirates.
“We have lost time and money,” said Sahil Desai, who is also an equity analyst with Darashaw. Sahil has already appeared for Level 1 of the CFA exam and was to appear for Level 2 this June.
The CFA programme costs $3,000 (Rs1.23 lakh) and has three levels. The programme is rigorous enough for some financial services companies to ask its employees to enrol for it.
“The CFA charter is a globally recognized qualification (and), we encourage all our team members to enrol for the programme,” said Navneet Munot, CIO, fixed-income and hybrid funds, Birla Mutual Funds. Munot termed AICTE’s action “unfortunate”, but was hopeful that a “solution” would be found.
On 18 May, AICTE issued a notification that said the CFA Institute and its programme were not approved by it.
“Technical education at all levels including certificate, diploma, post diploma, degree, post-graduate and research of any duration if they are conducted directly or in collaboration with a foreign university/institution require AICTE approval,” said the note sent by the regulator to the institute.
AICTE has directed local governments across India to “close down” operations of the CFA Institute.
The institute’s president and CEO Jeff Diermeier said he “will comply with all regulatory decisions”.
“We will do everything in our power to hold the CFA examinations on 3 June in India as scheduled, but we cannot guarantee that the exams will be held,” the institute added in a letter to individuals who had registered to appear in the exam.
AICTE’s order was prompted by an order of the Guwahati high court where Icfai had filed a case.
In March this year, the court directed the regulator to ascertain if the CFA Institute had the requisite approvals to conduct its programmes in India.
Earlier, in August 2006, the Delhi high court had said the US institute would have exclusive use of the terms CFA and chartered financial analyst, asking Icfai to stop using the terms after 2013. Icfai has appealed the decision. The CFA Institute claims its trademark is registered in 54 countries including India.
Icfai claims it was the first to start the programme in India. “Icfai introduced and popularized its own CFA programme in India over the past 22 years and is the first user in India,” says the institute’s website.
Meanwhile, apart from offering candidates the option of appearing for the exam outside India, the CFA Institute has offered to refund their fees or allow them to appear for the exam on the next scheduled date. It has also suggested that those enrolled to appear for the examination continue preparations “in hopes that we can resolve this issue before 3 June 2007.”