FSLRC draws road map to rewrite laws in financial sector

Kicking off the rewriting of legislations in the financial sector, the Financial Sector Legislative Reforms Commission (FSLRC) has created working groups for specific areas in the sector.

A senior official of the commission, which was constituted on March 24, said working groups had been created for different areas, including securities, insurance and pensions and banking. Former chairman of the Pension Fund Regulatory and Development Authority, D Swarup, heads the group on insurance and pensions. FSLRC is also appointing consultants, legal advisors and experts in finance and economics to assist each working group.

The commission had drawn a time-table, complete with milestones for completing its job within the stipulated period of 24 months, the official said. He said the five-six working groups would start functioning from June and would report to the commission within the fixed time-frame.

The reports, prepared with the help of consultants and experts in the respective fields, would than be discussed with stakeholders — regulators and government & non-government agencies. The final reports would be prepared by the commission after taking into account the responses of the stakeholders within the given time-frame, the official said.

There are over 60 Acts and multiple rules and regulations dealing with the financial sector and many of these have now turned archaic. A large number of amendments to these Acts have increased both the ambiguity as well as the complexity of the system.

The commission, headed by former judge B N Srikrishna, was set up after finance minister Pranab Mukherjee had, in Budget 2010-11, announced that the laws, rules and regulations in the financial sector be rewritten and streamlined to bring them in accordance with the requirements of the country's fast-growing financial sector.

Other members of the 11-member commission include former Axis Bank chief P J Nayak and Prime Minister’s Economic Advisory Council member M Govinda Rao.

According to the terms of reference, the commission would examine the architecture of the legislative and regulatory system governing the country's financial sector. It would also consider appropriate means of oversight from regulators and their autonomy from the government.