Supreme financial regulators like- Insurance Regulatory and Development Authority (IRDA), Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC) should be merged into a Unified Financial Agency (UFA), suggesting legislative reforms in the financial sectors a government-appointed panel said recently.
The Financial Sector Legislative Reforms Commission, headed by former justice BN Srikrishna, has also suggested setting up of a financial redressal agency (FRA) to address consumer complaints against companies across the financial sector.
The Approach Paper, on which the Commission will seek comments from the stakeholders, underlined the need for establishing an independent Debt Management Office (DMO) and a financial sector appellate tribunal to hear appeals against regulators.
“These changes will alter the Indian financial landscape from eight financial regulatory agencies to seven,“ said the Paper which will form the basis of the report of the Commission which was set up in March 2011 to re-write the legislations affecting the financial markets in the country.
At present, the financial sector is regulated by eight agencies which are RBI, SEBI, IRDA, PFRDA and FMC, Securities Appellate Tribunal (SAT), Deposit Insurance and Credit Guarantee Corporation (DICGC), and Financial Sector Development Council (FSDC).
The UFA, it said, would deal with all financial firms other than banking and payments. It would also yield benefits in terms of economies of scale in the financial system.
The Financial Sector Legislative Reforms Commission (FSLRC) was set up to recast the financial sector legislations in tune with the contemporary requirements of the sector. At present, there are over 60 Acts and multiple rules and regulations that govern the financial sector.
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