Monday, May 28, 2007

ICFAI + AICTE = blocking CFA

ICFAI is an Indian firm producing education and certification. The brand "CFA" is owned by a US company. The US company sued against use of the brand name "CFA" and Indian courts supported it. ICFAI harnessed the license-permit raj in education and got the CFA evicted. Bibek Debroy has a great article in today's Indian Express on this. You might like to read something that I wrote on a related theme a while ago. Update (31/5): Rajat Kathuria has a good article in Business Standard on AICTE.

In my opinion, ICFAI has made a mistake in their profit maximisation. Indian customers are now more likely, not less likely, to try to get the US CFA when they see ICFAI using the State to make sure they cannot access it. Long hotel stocks in Khatmandu.

25 comments:

  1. I agree with Ajay. CFA certifcation offered by CFA institute is a global certifcation, widely regarded by the investment management ocmmunity in the U.S. and in Europe. The June 2007 exam saw record enrollments from China and India. ICFAI needs to get its act together, it owuld be better advised to enter into a business tie up with CFA institute. That would be much smarter than getting temporary injunctions from the high courts barring CFA institute. AICTE has absolutely no role to play here. Even ISB is not registered with AICTE or any other body supervising management education in India.

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  2. CFA is a generic term and cannot be used by any single institute - Its like MIT suing IIT against issue of BE certifications or Harvard against issue of MBA in India as these cources were first started in the US by these Universities. The Indian government should block all these cources until our own certifications are recognized in their countries. ICFAI has won case against CFAI in the US over the use of CFA. http://www.icfai.org/pressrelease.asp
    May be we should all know the history than passing judgments on one single event.

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  3. NKHL the issue is not about the alphabetical characters used but about the CFA designation. If tomorrow NKHL starts an institution called IICAI then does that mean that NKHL can provide chartered accountancy qualification?

    Yogesh, I think thats what was done initially. ICFAI worked with CFA institute but when they saw that the demand would increase, they dumped the CFA Institute and developed their own CFA. I could be wrong but this is what I have heard.

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  4. you can get the latest updates abt the CFA program in india at http://www.kprofessionals.com/phorum/read.php?8,60

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  5. CFA institute wants to have monopoly over CFA trademarks and earn billions of dollars cashing it. Wall street, the number 1 financial centre in world helps in CFA institute branding.

    CFA brands in India are owned by ICFAI way back in 1990.They have registered with trademark authority of India their CFA mark and have rights to use marks in India. The cases are still pending in courts and let courts decide who is wrong and who is not. CFA is a generic term just like MBA, BA, B.com, CA etc.

    With rising income and 9% GDP growth, people like ajay will have no problem spending 1.50 lakhs for a certification program. Why will a indian student pay same fees as CFA institute charges its US student ?

    CFA from US is a great qualification. I agree. But it does not mean CFA from ICFAI is bad. Education as a source of basic knowledge helps in kickstarting a career. After 5 years experience, no body is interested what you did in school/colleges.

    I am proud ICFAI is fighting its case.

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  6. Some info that may be even of interest to Courts!

    ICFAI was started with collaboration from AIMR which later bacame the CFA Institute in the USA. The earliest versions of prospectus of CFA show pictures of Alfred C Morley of AIMR and Dr. Besant C Raj. And now the two institutes are fighting! In fact at that time CFA of ICFAI stood for Certified Financial Analyst rather than Chartered Financial Analyst. ICFAI then really stood for excellence in Finance education and certification. It is another story that today it is a mammoth money-making conglomerate.

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  7. I agree Diya that CFA is a certification and ICFAI has full right to fight for its case.. but why in the mean time stop students who are willing to pay for CFA USA.. it should be a choice right?? why stop any one when he or she wants to learn..??

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  8. Diya Mam

    agrred that ICFAI (hydearbad and tripura and all) is not bad

    but dont compare it with CFA US
    dirty tactics adopted by icfai will do the damage to icfai only

    people now are more aware of the politics going on (tripura i.e. guwahati)

    let people and industry decide which is better and anyone will opt for CFA US more as of now than ever before

    end of the day everyone wil realise wat is icfai is all about

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  9. I have done both US and Indian CFA and for your kind information Indian CFA stands on the tough side, however we Indian Always find things prettier if its associated with US or UK. And the only reason of CFA (AIMR)being so talked about is that it was started earlier and its originated from US.

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  10. The Delhi High Court has dismissed the writ petition of CFA Institute. However, the detailed order is not yet available yet. Basically the situation is that the CFAI has lost this particular case. The detailed order should be available soon.

    Source: http://www.kprofessionals.com/phorum/read.php?8,1159

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  11. I'm sorry. All these apologists for the US qualification don't know anything about the quality of the course offered by ICFAI. The Indian CFA is far deeper than the US one. AIMR (the US institute) has refused to recognize Indian CFAs even when ICFAI gave CFA charters in collaboration with AIMR. All you slaves to the white people should understand quality before you write nonsense about anyone.

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  12. /I have done both US and Indian CFA and for your kind information Indian CFA stands on the tough side, however we Indian Always find things prettier if its associated with US or UK./

    HAHAHAHAHAHA.

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  13. Hi Nikhil...

    i plan to do CFA and get good oppurtunities in India.which one do u suggest "desi or videshi".

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  14. Hi,

    I am a graduate working for an investment bank for the last
    7 years, basically doing MIS, Documentation. I now plan on doing my CFA. Which one is more recognised ?? Whats the pass %. Kindly help

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  15. well different people have different view's. CFA , ICFAI or U.S. well i dont know ,i m pursuing MBA(finance) & CFA(ICFAI). all i want to say is that cfa icfai or U.S is same as mba from india or abroad? which one is better? each one has it's own pron's & con's.

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  16. Call it a whatever if you like. I would like to call it “a call of duty”. If you are a true Indian, you must do whatever you can to prevent this.
    READ ON.
    The CFA institute USA, wants a patent protection for its CFA profession in INDIA.

    Let’s understand this

    (1) The CFA course was first started in USA by AIMR, the predecessor of CFA institute.

    (2)India is a signatory in the WTO.Under the WTO TRIPS convention , every signatory member country has to protect the intellectual property of entities engaged in trade (trademarks included).(go to WTO website , find legal texts ,look for intellectual property rights.)

    (3)CFA institute says that since it started the profession first, it has the sole right (under trade law) to institute the profession in INDIA & competition must be prevented

    LET’S KEEP IT HERE FOR THE TIME BEING, CONSIDER THE FOLLOWING
    First
    (1) Look up for the word profession in any dictionary or encyclopedia whichever you like. (Also try to find a legal definition if you can find).

    Let’s now discuss:-
    Profession is a specialized work, requiring specialized knowledge or skill (the very basic definition)
    Example-Doctor /surgeon, lawyer, accountant & also singer, painter, farmer, politician

    There are certain professions that are regulated e.g.
    Doctor, Surgeon, lawyer, Chartered Accountant

    The reason for regulation:-These professions perform certain functions that are critical to the public well being hence in the best interest of the public it must be regulated

    Let’s stick to the part of regulation ONLY.

    What does the process of regulating a certain profession involve?
    Constituting what & how much the body of knowledge of an individual in this profession should be.
    Determining what should be the competency level of the certain individuals.
    Regulating the conduct of that certain individual, during the course of his/her practice.

    AND ALL THIS HAS TO BE DONE FOR THE PUBLIC GOOD

    WHO DETERMINES WHAT IS PUBLIC GOOD

    HERE I WOULD STRONGLY ENCOUREGE YOU TO THINK,WHO YOU HAVE GIVEN THE RIGHT TO DETERMINE WHAT IS PUBLIC GOOD.

    CAN THIS RIGHT BE CONSTITUTED AS TRADE?
    CAN THIS RIGHT BE PARTED WITH, BY THE PERSON OR PERSONS, WHOM IT HAS BEEN ENTRUSTED
    &
    CAN A CERTAIN COMMERCIAL ENTITY HAVE A CLAIM ON THIS RIGHT UNDER A TRADE PROTECTION LAW? (ESPECIALLY FOREIGN ENTITY)

    Anyway

    Let’s talk of the finance & accounting profession

    SO HOW DID THE AWARD'ING OF CHARTER IN ACCOUNTING PROFESSION COME ABOUT.

    (1) When the business around the world was not so complex there were different methods of book keeping in practice usually within the same country or even within a same locality. When businesses grew complex & governments needed uniform tax bases to collect taxes, they encountered this problem. Hence in order to address this they prescribed uniform accounting methods that were enforced by legislation & had to be mandatorily followed.

    Now since the body of knowledge of accounting is vast & complex & not everybody can be expected to be academically sharp enough to attain a certain required level of competency /the legislators themselves could not create or moderate the body of knowledge .The legislative bodies had to institute authorities to prescribe & moderate uniform methods, Train & examine individuals & confer designations of say "Chartered Accountants” to them. (Wheather the word chartered be used or not)

    A chartered Accountant is thus given an authority by a legislative body (parliament) through an institution created by it to carry out the profession of accountancy. Every business functioning within the jurisdiction of the respective legislative body has to follow the prescribed accounting methods & get their account books audited by a chartered accountant.

    When our economy became more complex, more streamlining was needed, hence giving birth to cost accounting profession & company secretary profession.

    Similarly all countries around the world have seeked to regulate, moderate & streamline the accounting profession as & when they have felt the need to do so, by bringing in appropriate legislation .They have created appropriate bodies that do this job for them & its members are awarded with charters to carry on their professions (wheather the word chartered used or not)

    (2) '''Any Statutory qualification in finance & related field (given in any country) can be broadly divided into two parts

    (a)The basic knowledgebase of different subject’s relating to accounting. Security analysis, portfolio management, management accounting, project management & the like. There is not much difference in what in taught in this country to what is taught in others.

    (b)The legislative Part, i.e. the laws regarding accounting Disclosers , the prescribed methods of book keeping, income tax laws, investment related laws, foreign exchange related laws etc.Those differ from country to country (country specific)

    (3) Well let’s see what did countries of the world do when there was no CFA institute .Was there no financial analysis. As far as history goes the accountants did the job. Till the financial systems grew too vast in proportions & work became too complex thus requiring specialists. Today MBA’s, Accountants, & other finance related professionals also do this job.

    So the CFA institute did not invent FINANCIAL ANALYSIS

    INSTEAD WHAT IT WANTS IS TO INSTITUTE & REGULATE THE PROFESSION IN INDIA & ELSEWHERE

    (In its own admission before the Delhi high court It has admitted this & this right they want to earn it under a trade protection law. When the AICTE tried regulating it, it contended that it does not offer any technical education, but offers a professional designation & hence is self regulatory.).

    I ENCOURAGE YOU TO THINK AGAIN.

    (1) CFA institute has a uniform curriculum across the world. Can its members really help an investor who wants to invest in India & have to deal with India’s financial & investment related regulatory framework. (Where does its gold standard work in this case?)

    (2) So what does the work of the CFA institute primarily constitute?

    (a) Determining what the body of knowledge an individual in this profession should possess (REGULATORY)
    (b)Determine what should be the appropriate level of competency (REGULATORY).

    (c)Regulate the conduct of its members through out their practice (REGULATORY)

    The students follow a self study regeimn, the knowledgebase is publicly held,


    NOW THE BIG QUESTION

    (1) Does this Service given by the CFA institute constitute a commercial service in general sense of commerce & trade? And does it come under TRIPS.

    (2) If so who is the Customer? People of India? The Indian State? The parliament of India?

    (3) Nature of service: - To Determine Public good (in a narrow sense of course, in regulating a profession)

    (4) Sole Right of CFA Institute to do so (under the trade mark protection law).

    (5) When they say, competition must be prevented, WHO EXACTLY IS PREVENTED, FROM DOING WHAT.

    Now in general, who so ever has heard or read about it, has not given much thought or importance to it.

    We simply got swayed away, that if CFA institute did it first, then it has earned this right
    Hence this right must be protected under the trade mark protection law (copyright).

    I CANT SAY MUCH ABOUT THE PUBLIC MEMORY,
    BUT AS FAR AS MY MEMORY GOES,
    A SIMILAR EVENT HAD ALSO HAPPENED IN THE INDIAN PAST,
    WHEN THE BRITISH EAST INDIA COMPANY CAME TO INDIA.





    Go to wikipedia & read certain articles written by me in wikipedia under CFA, Indian CFA, in the discussion page.

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    Replies
    1. Hello Ashvini,

      I have read all your content here, but what to do now? At this stage what should CFA from ICFAI do? As it has stopped the Program and that to with out of Court Settlement with CFA Institute, USA.

      Delete
  17. Dear All,
    Both Indian CFA and US CFA has their own credibility, if some one interested in US CFA then go for that, or If someone interested in INDIAN CFA then go for it, how can u blame the instities, we do not have any right to talk about those Premier institutions of the world and India.its we are going behind them, they are not forcing us to come and joing, so choice is urs, but never ever blame any institute or any body. Some people have completed Indian CFA and have got well jobs in top MNC Invstment Banking companies, and some are not, it does not matter which CFA u have done it matters how much u worth in Knowledge wise and how much u can implement in your real business practices.
    many people dont like my comments fine, if u dont like u can send ur comments to MANJUNATH@IDONTCARE.COM

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  18. NOW icfai provides CFA after DELTA of MS finance... its tough... but i dunno whether it is equal to any master digree or not... or even a post graduate diploma or not... after DBF(diploma in business finance) and CFA if anyone wish to for for further studies in USA, are they going to entertain the applicant like in PHd finance program?

    do u guys still b'lv that CFA is better then normal MBA??

    In india, these days CFA has a very limited amount of job... that factor will also play a major role deciding in between indian n international CFA.

    go to naukri.com, serach with CFA as a fresher... u will find it...

    am an INDIAN CFA

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  19. I am too shocked when sometimes i come across that people make an argument that if someone starts an istitute in the name iicai and produces the accountants.I am sorry to say that people to rethink the fact.Should every country depend on ICAI,India?Is the accountancy profession the trademark of ICAI across the world?
    Do the other countries not have their own acountancy institutes?
    Moreover CFA,ICFAI is on the legislative guidelines.An bill has allready been produced in the parliament.If that bill is passed then it will have a separate reputation and community like ICAI and ICWAI.Why the indian government allowed ICWAI to establish a similar qualification of CA?Was the government so stupid?However the have completely different perspective.I think the tough question is only the industry recognition.Once government and industry start recognise the course every mouth will shut.Because as far as the question concerns with the quality CFA,ICFAI is as good as CFA,USA.

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  20. I am a student of both ICFAI CFA and CFA (AIMR). So if we wanna compare the two course we can say that CFA (AIMR) is better because:
    1. ICFAI books has lots of mistake whereas in there case its virtually nil (only typographical).
    2. ICFAI course content is not as good as there ones.
    3. Many concept in ICFAI course is not taught properly and with enough detail whereas there (AIMR) course is very good and nicely written.
    4. Both exams are rigouress equally.
    5. ICFAI do not update there books on regular basis whereas they do this.
    5. CFA Institute track record is clean wheareas ICFAI has left many dark spots and is known to all.

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  21. One more thing that ICFAI's CFA don't teaches many important topics whereas they do like behaviorial finance, some core econometric concepts, etc.

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  24. Interesting post. I agree what Manju said.Whether you take US CFA or INDIAN CFA, it doesn't matter, as long as you learned and be successful.

    Besides, it still depend on you on how you use your knowledge in the real world. We have nothing to do with them, so just go with the flow.

    ReplyDelete

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