Panel moots ‘super-regulator’ to subsume SEBI, IRDA, FMC
23 Mar 2013
The Financial Sector Legislative Reforms Commission (FSLRC), set up by the government to look into market regulatory issues, on Friday proposed a unified 'super-regulator' for markets, insurance, commodities and pensions. Banking has been kept out of the purview of the proposed regulator for now.
The FSLRC suggests a unified financial agency that would subsume the functions of critical agencies such as the Securities & Exchange Board of India, the Insurance Regulatory & Development Authority, the Provident Fund Authority (PFRDA) and the Forward Markets Commission.
Banking operations, monetary policy and payment system would continue to be regulated by the Reserve Bank of India (RBI).
The FSLRC, headed by Justice B N Srikrishna, in its final report also suggested doing away with the multiple agency architecture for scanning foreign capital inflows.
At present, foreign direct investment (FDI) policy is framed by the Department of Industrial Production Policy (DIPP), while proposals are cleared by the Foreign Investment Promotion Board (FIPB) after getting clearances from various agencies like Enforcement Directorate, the Central Bureau of Investigation (CBI), and RBI.
The report submitted to finance minister P Chidambaram also suggests setting up a debt management office for raising resources for government expenses. Currently government raises funds by issuing bonds through the RBI.
Chidambaram told newspersons in New Delhi that the entire report will be made public in three or four days. "I intend to brief the Prime Minister (Manmohan Singh) either today or tomorrow," he said.
If the recommendations of the panel are accepted the government will have to bring in legislative changes in 20-25 existing Acts to facilitate the new structure.
Srikrishna said the final report is on the lines of the approach paper that the panel had come out with in October last year.
"Most of them are in line with the approach paper. But there are certain issues on which we have now more inputs. So they have been modified," he said, adding that the changes could be implemented over a period of time.
