July 28, 2017

ETF assets size to rise from EPF's 225-bln-rupee investment in FY18

A story I wrote this week for the organisation I work for presently.



ETF assets size to rise from EPF's 225-bln-rupee investment in FY18
Thursday, Jul 27
    The assets under management in exchange traded fund schemes
of mutual funds would grow by at least 225 bln rupees in 2017-18 (Apr-Mar)
due to investments by the Employees Provident Fund, going by the data given
by Minister of State and Employment, Bandaru Dattatreya in Rajya Sabha on
Wednesday.
    The Labour Minister said the estimated investment in ETF for current
financial year was approximately 225 bln rupees and this was due the rise in
investment limit in ETFs to 15% from 10% sanctioned by the trustees of the
EFP in May this year.
    In the last two financial years, 2015-16 (Apr-Mar) and 2016-17 (Apr-Mar),
the EPFO has invested a total of 215.61 bln rupees in five ETF schemes of
three fund houses, the Labour Minister's statement showed.
    The current value of assets in 26 ETFs amounted to 387.90 bln rupees, as
of the end of last month, data from Value Research Online showed.
    Since EPF investments in equities through ETFs are long-term in nature,
the funds invested would typically still be invested in the ETFs.
    The one-year returns in these ETFs is in the range of 15-19% as of July
25, and the value of EPFO's investments would have also appreciated by at
least 15%. This would make their current contribution in ETFs' current asset
size to be nearly 60%.
    EPF investments over the last two years were the highest IN SBI Mutual
Fund's Nifty 50 ETF at 128.34 bln rupees. Other ETF schemes invested in by
EPF were SBI Sensex ETF, UTI Nifty 50 ETF, UTI Sensex ETF and Reliance CPSE
ETF (see table).
    The aggregate of the assets under management of these five ETFs as of
June end was 359.31 bln rupees, making up for over 90% of assets of a total
of 26 ETFs in the mutual fund industry.
    As per EPF's mandate, its investments in ETFs can only be in Nifty 50 ETF
or Sensex ETF. Of the 26 existing ETFs, 20 would, therefore, be eligible. But
mutual fund analysts are not sure whether EPF will diversify beyond the
select few ETFs it has invested in till date.
    The EPF is also likely to invest in any new CPSE ETF the government may
launch through a fund house in the current financial year. Till date, it has
invested in 18.08 bln rupees in CPSE ETF, which is managed by Reliance Nippon
Mutual Fund.
    The table below lists details of the ETFs where EPF has invested in the last
two years:

MF scheme           EPF's investments        Current AUM
---------           In FY16     In FY17      of scheme
                    -------     -------      -----------
                              (In bln rupees)
                    -------------------------------------
SBI Nifty 50 ETF     49.22       79.12          200.25
SBI Sensex ETF       16.55       26.91           61.74
UTI Nifty ETF         Nil        19.11           30.55
UTI Sensex ETF        Nil         6.62            9.68
CPSE ETF              Nil        18.08           57.09

(From exactly 5 years ago) An editorial on abuse of double taxation avoidance treaties

This-day-that-year...
https://natant.blogspot.in/2012/07/life-in-financial-markets-abuse-of.html  ...
July 28, 2012


Here is an editorial on the issue of double taxation avoidance agreement signed by India with over 70:

Obfuscating role of DTAAs 
India-Mauritius DTAA is being used for everything but what the concept stands for

Three weeks before an important meeting of Indian and Mauritian on the revision of the double taxation avoidance agreement (DTAA) between the two countries, the minister of 
foreign affairs, international trade and cooperation of Mauritius was camping last week in India and holding press conferences with the Indian media in what appeared to be an attempt to soften the hardline thinking on DTAAs among Indian tax and government officials. 

This was notwithstanding the fact our Prime Minister currently holding the additional position of a finance minster is not seen as someone being anywhere close to the hardline thinking group of which the previous finance minister, Pranab Mukherjee, was considered as a crucial member. Mukherjee played a key role in getting a draft of the General Anti Avoidance Rules (GAAR) on direct taxation ready and seeking its implementation as soon as possible regardless of whether the larger proposed Direct Taxes Code was approved or not. 

With influential members of the political establishment being on either side of revise-and-curb-allowances-under-DTAAs, with the one holding the status quo view being more influential right now, it is time to take a hard look at the original purpose and objective of a DTAA whether or not any of the DTAAs signed by India with over 70 countries meet them or not. In a world, and in an era encompassing a few centuries, where global trade has inevitably flourished, companies and individuals earn income and make profits from their business operations and transactions in multiple countries. It becomes not just unfair, but also unviable, for a taxpayer if the income or profit made from operations in a foreign country is taxed by that foreign country as well as his home country. 

It was precisely to remove this element of double taxation, treaties such as the DTAAs were conceived and implemented by countries across the globe. The idea was always to eliminate unfair double taxation in order for countries to encourage trade between themselves and attract foreign investments. It was never the purpose to do this by making the rate of taxation very low or almost zero. But this is not considered by the status quo proponents of India's DTAAs with all countries including with countries such as Mauritius which are un-deniably nothing else but tax havens since they charge zero or close to zero rates for income or capital gains taxation. 

Foreign investments into India, whether direct or indirect, are pouring in through such tax havens. About 37 per cent of foreign direct invesments in the country come from Mauritius-registered companies. Clearly, this is nothing but treaty shopping by companies from other countries and there is also the element of round-tripping by Indian companies which route their domestic investments through shell companies set up in Mauritius to evade domestic rates of taxation. 

Such misuse of DTAAs should not be allowed to continue regardless of the threat of foreign investments drying up if they are stopped. India-Mauritius DTAA use is perfectly legitimate if a global investment firm, with its home base in US, or a European country, sets up shop in Mauritius, garners funds from domestic Mauritians and then invests it in India. But if the source of funds are not Mauritian, as they pre-dominantly, then the DTAA ought to be immediately revised to prevent it from happening. 

Even the draft GAAR clauses are lenient in the sense that they only cover residency which only requires board meetings to be held in the other country and adequate manpower and capital to be deployed in the business. Capital requirement is minimal for investment companies seeking registration in Mauritius and even GAAR can not effectively be a party pooper. But a real revision of the India-Mauritius DTAA can provide the much-needed cleansing.

July 20, 2017

An old interview with C.B.Bhave when was the NSDL chief

Sharing an interview from exactly 13 years ago. I had interviewed C.B.Bhave when he was heading NSDL. He served in NSDL for about a decade. After NSDL,  he was the SEBI chief for around 3 years.

I was working in Outlook Money magazine at that time.

The interview:

"Before NSE and NSDL were built people could not believe that large automated systems with nationwide applicability are a feasibility in this country"

July 2004

It was a momentous decision, both for him as well as for the stock market, when in July 1996 C B Bhave quit a heady post as a senior executive director in charge of the secondary market department at the Securities and Exchange Board of India (Sebi). He was asked--and he agreed to--take over the reins of the newly-formed National Securities Depository Ltd (NSDL) as its managing director. NSDL had the mandate to introduce the depository system in the country's capital market. It went live in November 1996.

A civil service officer since 1975, Bhave worked in the central government and state government of Maharashtra before joining Sebi when it was set up in 1992. Very few securities market professionals in the country have as much intricate understanding of the capital market as Bhave does.

In the eight years he has been in NSDL, the benefits of depository have reached investors in no small measure. Bhave has been there all along. He wants to sustain the stock market role of the depository but also wants to make the depository be of use for purposes other than that of stock market. Read on how in an interview with Bhave.

Five years since depository began and investors feel that costs which should have come down has in fact gone up.

We don't charge any annual fees to the DPs. How much a DP charges the investors is something over which we have no control. We enable more and more DPs so that there is competion... But even there we found that there is a range of fees, some charge high annual maintenance charge (AMC) and some charge as low as Rs 100. We haven't investors change their DPs.... Somehow, we have not seen costs as a determining factor in where the investor will decide to go. We have seen DPs having offices side by side, one is advertising that that his charges are lower but still no movement from the other to him. It is also an issue of which DP the investor will prefer from the point of view of his comfort and what kind of services he wants.

Is it because the investor feels that the charges are high across the spectrum and so does not feel motivated enough to check out all?

There is quite a variation if you look at the charge structure of DPs as communicated to us. It is up on our website www.nsdl.co.in. It is possible for investors to go there and compare the charges across DPs.

I don't think one can do anything about this it except to see that competition is there and to check out from the charge structure whether is there is any sign of cartelisation. I haven't seen any sign of cartelisation. There is tremendous variation in the charge structure across DPs.

Charges vary only above the bare minimum you charge. For instance, you charge a transaction fee of Rs 8 only per debit whereas DPs charge investors anywhere between Rs 8 and Rs 25 and some of them even charge these for credits. Are you not concerned about these anomalies?

Some DPs are even charging transaction fee on the value of the transaction. So there is tremendous variety. There are two ways of looking at it. One, we say is that there is actual variety. But I don't see a role for NSDL to fix charges of DPs to investors because that is a policy we have kept away from. Even in law we don't have that kind of power.

There are DPs who do not charge on the credit side, then that does not seem to drive the investors to open demat accounts with them. The DP charging more seems to have his business flourishing as much as the DP who is charging less. In any consumer it is a legitimate aspiration to get that service at a lesser price than what it is today. But whether that price alone is a determinant in deciding whether to avail of service from X or Y or Z there doesn't seem to be strong evidence linking the price to his decision.

In a sense, price variation is very demonstrative of the fact that competition is really at work. Otherwise, you would have seen uniform prices and that would be somewhat like cartelisation.

Investors in metros have access to multiple DPs. But that is not the case in small cities or towns where you have just one or two DPs.

It is a valid point that the choice that one has in places like Mumbai or Delhi one will not have in other places. But we should equally consider the other fact that no DP is saying that my charge in Mumbai will be so much but in Ahmedabad it will be so much. Their charges are uniform across the country. So whatever the intense competition in Mumbai or Delhi drives them to charge is something that is being charged across. If there is only one DP and he is over-charging in a centre some other DP which can conduct operations at a lower cost will see that opportunity and will probably try to get there and take the investors away. So maybe those places don't have so much volumes which is why they are not generating enough competition among DPs.

What we typically do as an exercise every six months is that from the addresses of investors we do a district-wise analysis of how many demat accounts are there in a particular district and feed this information onto DPs so that if a DP feels that, lets say he is also a broker and on his trading terminal a lot of orders are coming from this particular district but the demat accounts are very few in that district he could sense a business opportunity and go there. We try to make this kind of information available to people.

But the feeling persists in many investors that competition has not had an impact as far as costs are concerned. They do not think variation in prices is there. Do we have to look at competition as the main issue, do we have to leave it totally to competition. Is that the best approach?

Prices to be determined by competition is one of the things. We must be alert all the time to any monopoly that may be developing or if there is no monopoly situation and there are indeed many players whether there is any cartelisation taking place. If all DPs are agree to one price and says that we will not go below this and get all consumers to pay this price. That is the second aspect of competion. Whether the players who are supposed to compete with each other are eliminating the competition by forming some kind of a cartel. I think the third thing one has to look at is what kind of signals we are getting from investors in terms of investors joining that system on a consistent basis and wanting to remain in the system. All these factors will combine to tell us the story in any given situation.

So if there is cartelisation and if there is stagnancy in growth of investor accounts you will notice?

We will notice and we will be worried as business people. We will try to find out whether DPs are doing something wrong or what is it.

In terms of numbers, what is the intensity of investor complaints you receive?

About 70-80 per cent of the complaints that we receive are relating to delay in dematerialisation. That is one area where we don't have a proper legal or regulatory force because the depository can do nothing to the registrar or the issuer. We don't have a jurisdiction over them. Even Sebi's ability to take them to civil courts and get some decisions against them is bogged by the fact that our court process are so slow. But we adopt other means like put up a list of top 200 issuers on our website that are worst in terms of delay in dematerialisation. We inform our DPs to tell the investors not to put for dematerialisation their physical shares in these companies because they will lose their physical shares and not get electronic credit. So, by this way at least we keep the investors away from such delays. Since this also involves the reputation of the companeis we think it might have an impact on them.

But the good part of the story is that if you take the top 500 BSE-NSE companies there are very little complaints. The processing time for these companies is tip-top. The complaints are all in the lower segment. That lower segment is huge in terms of numbers.

Monetary fines is an option?

Not for the depository. We don't have the jurisdiction. We have a jurisdiction with DPs since they do business with us. But the issuers does not do any business with us.

You impose no charges on the issuers?

Charges are there when the issuers want to do a corporate action where they have come up with a public, rights or bonus issue. Otherwise their relationship with me is like a post office. When you want to post you pay the post office. The post office can not take any action against you.

So, can you do something against erring issuers when they approach you with the corporation action request?

Actually, these are not the companies which are coming out with corporate actions.

What about the other complaints?

We receive other kinds of complaints also like transaction statement not received. In these cases we use force. We tell the DPs you have to revert to the investor. Then there are investor complaints of non-execution of debit instruction slips by DPs even though he had submitted it on time and as a consequence of which his shares got auctioned and he suffered a loss. In these matters, we carry out an enquiry and if we determine that the DP was at fault then we make the DP pay compensation to the investor.

At times, we find it difficult to determine whether the investor is right or the DP is right. In which case we send the cases for arbitration. We have a arbitration mechanism and we have seen arbitrators give decision at times in favour of investors and at times in favour of  DPs. Where the decision is adverse to the DP then the DP has to pay up. Where it is adverse to the investor we can not do anything. His recourse then is the court.

How many arbitration cases have taken place?

Uptil now, about 50.

In a particular case more than a year back, we had a large number of complaints coming up about one particular DP. There we had to a slightly different kind of action. We told the DP that these are the places from where the complaints have come and we are going to visit that place, put up an advertisement in the local papers and invite the investors and you will have to on the spot satisfy me that you have resolved their complaints. We told the DP you send your representative to these places, contact your investors and resolve their complaints. Sometimes we have to resort to this type of action.

With DPs we can be fairly stringent. Like a stock exchange can with its broker-members. But with companies, like a stock exchange can only suspend or delist a company, we can only suspend the ISIN of a company. But the investor suffers.

There have been a few fraud cases where unauthorised debits have taken place through forged signatures and shares vanish from investors' demat accounts. Mostly, it happens due to DPs lack of diligence.

When such complaints come to us we first see to it that the shares are restored to the investors accounts. Over a period of time people have been discovering new ways of committing a fraud. We are trying to plug them. There is no way of getting one step ahead of the thief. There are three-four things we have done. One is that the debit instruction slip book that investors get from DPs must alone have a request for a new debit instruction slip book. If the investor has lost this debit instruction slip book then the DPs must ask the investor to produce a transaction statement so that no third party can come and pick up the debit instruction book. Secondly, the DP has to verify with the investor about the representative he has sent and if you are not satisfied ask the investor to come personally.

Another thing we found that people were first putting in an application for a change of address so that the transaction statements does not go to that investor. Then put in a fraudulent transfer. Now the fact that the debits have taken place will go to the new address.

So we told the DPs that they have to make the procedure very stringent. Unless they find complete proof and have a audit trail in their office about who authorised the change of address, you will not effect the change. A lot of people who have transferable jobs were bitterly complaining about this. But we had to get stringent.

Then we have an internal system of randomly selecting a portion of investors and dispatching side transaction statements to them. They can compare these with the statements they receive from their DPs. The fact that the DPs know that statements can go from us to anybody acts as a check on them.

We also carry inspections on DPs offices once every six months and check for all kinds of irregularities and the efficacy of their systems. We also require the DPs to carry out internal audits and submit a report to us every quarter. The things to cover in these audit reports are prescribed by us. We take these audit reports during our inspection visits.

These are the precautions we take but ultimately at the end of the day your account is your account and you have to be vigilant and check their accounts. We have a internet-based holding statement view facility which currently 35 DPs are subscribed to and they offer it to their investors. In fact, a lot of other DPs are already offering it directly on their own this facility through their websites.

Can an investor who is not sure of the authenticity of the transaction statements he receives approach NSDL and verify his account?

Absolutely. To give one instance. In the 2001 scam there was a rumour that one of the DPs was involved in the scam and likely to go bust. Investors having demat accounts with that DP were worried about their shares. Realising that this was a genuine fear we send a transaction statement to all the investors of that DP.

You can courier to us or email us if you want a verification. We will generate a statement and send it to the address of the investor in our system.

One of the safeguards for investors is freezing the account. Can an investor freeze just some and not all stocks in his account?

Yes. Not only that but within a stock itself you can freeze a part holding. If you have 1000 shares of a stock and want to freeze only 500 shares you can do it.

You also offer internet-based debit instruction facility to your DPs who offer it to investors. Whats the progress? How safe is it?

When you offer the facility for people to give a debit instruction to you electronically then you have to worry about whether that instruction has indeed come from the person who was supposed to give it. In the physical mode, we take care of this worry by verifying the signature on the debit instruction slip. In the electronic mode, this is not possible. One way we do it is through a smart card, its PIN, and a smart card reader, which is akin to digitially signing your instruction. But the costs for these we felt for ordinary investors will be too high. For investors, we have a password-based facility where the investor can transfer the shares to only one or two specified settlement accounts of their broker and not to any other investors' account. And the broker has to give us an undertaking saying that if by mistake I get shares from this client for which there is no underlying transaction I will return it. Here, even if somebody steals your password he will be able to transfer shares from your account only to the pre-specified broker settlement account. He can't take it into his own account.

This facility has had limited success, like similarly in online trading and online banking. We overestimated users' friendliness with the internet for carrying out transactions. But we haven't abandoned the idea. We believe it will catch on and when it catches on it will grow very fast.

We now have about 30 DPs who have subscribed to this faciltiy. So, theoretically, all their clients can use it. But not many are using it. The numbers are very modest. I think it won't be more than 7,000 investors who are using it. These are fairly transaction-intensive investors. In the last two years about 20 lakh debit instructions have been executed through the internet. Its not bad in the sense that 20 lakh pieces of physical debit instruction slips never happened and no physical verification was done at the DPs offices.

We hope it will catch on. Part of the impetus will be the short settlement cycles. Investors could find it easy to electronically submit their debit instructions rather than go to their DPs offices and hand it physically.

You moved from a value-based charge structure to a fixed rate regime. Does this not subsidise high-value investors at the cost of small-value investors who have to bear a higher rate?

Its a fair question. Any commercial entity has to relate its pricing to its cost. In the automated environment of a depository, whether there is an entry for one share or one lakh shares in a demat acocunt, the computer memory and the computer processing power is the same. Again whether this one share is worth Rs 5,000 or worth five paise the system is neutral to it. Therefore, our costs are driven by how many such entries investors need and how debit and credit transactions take place. It is unrelated to the price of the shares. If the market goes up by 25 per cent there is no reason for me to charge 25 per cent extra because my system requirement is the same.
This is not something that is unusual. There are umpteen examples of public service areas where this principle is followed. Take telephone for example. If you make one call, whether you are Ratan Tata or an ordinary man you pay the same thing because the telephone company says look my costs relating to how big an exchange I put up is not related to who is making this conversation and what is the content of the conversation. We are in this kind of a paradigm. Commercially, it is a correct principle to relate your pricing to cost. Otherwise, you could get hit. Let us assume, in my system I have two crore demat positions and lets say I get two crore transactions. Its possible to imagine a scenario where another 50 lakh investors join me who create two crore demat positions which means I have to double my capacity. The number of transactions, let say, doubles to four crore. But the value of these additions could be one-hundredth of the earlier positions and transactions. So though I double my capacity and incur high costs I will get a revenue which is much less if I charge on the value. I will be forced to increase the charge to the market because I have to meet those costs. It will be ridiculous to explain to the market that my business has doubled and I am increasing my charge.

But do not the risks involved in a low-value transaction differ from high-value transactions? Don't you have to compensate more when a DP's errors or fraudulent transactions is of a higher value and results in a loss that could make him go bust?

There is an insurance policy on behalf of the DPs. The insurance policy premium that the DPs have to pay depends on the value of the shares held and the value of the transactions. So we do not apportion the same premium to DPs across the board. The DPs who have higher value holdings and higher value of transactions have to pay a higher premium.

What are the kind of premium amounts being paid by DPs?

I can not disclose that. But the variation is from one to ten. If some DPs are paying a particular amount then some DPs are paying 10 times that amount.

Which insurance company is this done through?

Uptil till two years, it was the New India Assurance. Since then, it has been Ifco-Tokyo, one of the private insurance companies that have been allowed in general insurance in the country.

A question which is becoming important today is the issue of remat option. Investors wanting to get rid of shares in companies that have got delisted or disappeared can neither sell since these are illiquid nor get it rematerialised (in order to tear off the certificates) due to the non-existence or non-cooperation of the companies. As a result if he wishes to close his demat account he is unable to do so and has to continue bearing the charges.

Like in dematerialisation, if the company delays or refuses to rematerialise we can not do much because we do not have a hold on the companies. To the extent that these companies are reputable ones they will be affected by the complaints received against them and we putting up a list of names who are refusing to rematerialise or delaying it.

For the untracable companies I don't know whether there is any solution. The question is where will you keep these shares and what will the liability of the legal entity who will keep these shares. These shares have to be kept in some account and belong to somebody.

Can NSDL make holdings in these dud shares charge-free?

We don't know if thats possible. We will have to dynamically monitor and classify which shares are dud and which are not.

The only way, currenlty, for an investor who wishes to close his demat account but is unable to get rid of dud shares is to transfer these shares to another person who is active in holding demat shares.

Postal savings schemes�National Saving Certificates (NSCs) and Kisan Vikas Patras (KVPs)�went demat recently. Whats up with it?

It was started as a pilot scheme in certain post offices in Mumbai only. It has had a limited success so far. About Rs 10 crore worth of NSCs and KVPs have been demated so far. That is people have asked for demat instruments. There is no demating of existing instruments. There is only future instruments you can ask for when you buy. Our experience is that we have a little more than 2000 accounts into which these credits have gone. Of these 1000 were existing demat accounts where there were already equity securities . For people who do not have anything to do with the equity market and invest in postal schemes we had to devise a separate scheme. The postal department�s point was that these investors don�t pay anything when I issue them a physical certificate, so there should no charge for them if they have only NSC or KVP in demat account. For them a special demat account is opened into which you can not put any equity shares or other securities.

This has to be done through a DP?

You have to only give the application to the post office. We do the work and send the investor his statement. You can not use the account for anything else.

So the post office is defacto a DP?

It is not. The post department has given the job to us. We have, in turn, outsourced it to one of the registrars, Intime Share Registry,

This account has to be with a DP then?

No. It is a separate account. No debits are allowed and credits are only in KVPs and NSCs. You will have to wait and see what is the government's decision on expanding this.

As in allowing existing demat accountholders to hold postal schemes?

More than the existing holders our point to them has been that we need to make it mandatory that from certain post offices only demat will be available. This is the segement of the market with which we are dealing which is not necessarily aware of the demat facility. It will have its initial hesitation and so on and so forth. If the government feels that it is in its interest to do it then it can be considered. After all you are not changing anything. Earlier, you were getting a certificate. Now you will get a statement of account. He still gets a piece of paper. The convenience to him here is that he doesn't have to preserve it for six years and produce it for discharge. The records are electronic. If you lose your account statement you can ask for a duplicate one.

Another suggestion we made to them is that they can use our system which is keeping track of maturity dates and automtically send the cheque to the investors a day or two in advance of the maturity date. Today, you have to keep a track of the maturity date. If you go 10 days or three months late its too bad. You will not get interest for those days.

We have also made a suggestion that as an alternate electronic credit of the redemption amount can be made to the investors' bank accounts. All this is possible in the depository system.

How many post offices offer this facility currently? Is the number likely to go up?

We have it in about 35 post offices in Mumbai at present. It is in the government's hands to increase the number of post offices.

How has our markets developed? What would you like to tell investors?

Five years ago, if you were investing in equities in addition to being concerned with the price at which you were buying or selling your shares you had to be worried about the problems of delays in transfers and bad deliveries. Since then, what has happened in an investor's life is that today when he invests he has to only worry about the transaction cost and the price of the transaction. Brokerage rates which were as high as 2.5 per cent in the physical environment because of the threat of being stuck with bad deliveries. Now he doesn't face that risk because of which the brokerage rates have reduced substantially. This in turn benefits the investor.

But I would like to tell the investors that do not ever assume that this system will make the world fraud-proof. The systems are run by human beings and as long as there are human beings in a chain of transactions there will be a tendency to do things by going the wrong way rather than the straight path. And, therefore the best guarding for your assets is you yourself. You have to be vigilant. It is not to say that the system will not provide satisfaction or have safeguards. But it will be foolhardy to rely only on systems. It is always good to take your own precautions.

The impact of the depository system has been two-fold. One is in the area of settlements where the benefits are well-known. But I think the benefit has come from another area too which is very important from society's point of view. Before NSE and NSDL were built in this country people could not believe that large automated systems with nationwide applicability are a feasibility in this country. Now because these systems have been built and people see them as successful in implementation they are beginning to question if you can do it in this area then why not in other areas.