Regulators oppose FSLRC as it caps their power: Srikrishna

Some of the regulators oppose FSLRC recommendations as they feel that they would lose jurisdiction on some of the aspects, Justice (Retd) B N Srikrishna, who headed the high-level panel, said today.
"They are opposed to it. What happens is their jurisdiction gets cut down. Any regulator is going to oppose it because it will put a cap on the power that he exerts. He is made answerable to somebody else," Srikrishna said.
When asked about his reaction to the recent remarks made by RBI Governor Raghuram Rajan on Financial Sector Legislative Reforms Commission (FSLRC) recommendations, he said: "I am a judge so I know how to moderate it."

Rajan had recently flayed the much talked about Financial Sector Legislative Reforms Commission (FSLRC) and described one set of its recommendations as "somewhat schizophrenic".
Earlier in his address at Financial Sector Conclave (FINSEC - 2014) organsied by Ficci, Srikrishna said the RBI Governor as an academician (prior to RBI job) has suggested that regulatory actions should be subject to appeals.
"In the years since the Securities Appellate Tribunal was set up to hear appeals from the SEBI orders, the quality of SEBI orders has increased. And so has the quality of SAT decisions. Regulators should take comfort in this fact. Thankfully, the independent academic Dr Rajan also disagrees with the RBI Governor Dr Rajan on this aspect.

"In his 2009 report, A Hundred Small Steps, Dr Rajan wrote 'Regulatory actions should be subject to appeal to the financial sector appellate tribunal'. This thinking that guided the FSLRC's deliberations...," the retired Supreme Court Judge said.
He said though the FSLRC report submitted along with the draft Financial Code, last year, the work started by it is far from over.
The FSLRC was set up in March 2011 to review and rewrite the legal institutional framework of financial sector laws.