There are over 60 Acts and multiple Rules/Regulations in the financial sector that date back to decades, when the financial landscape was very different from what it is now. However, a large number of amendments were made in these Acts over time, but has increased the ambiguity and complexity of the system.
With a view to rewriting and cleaning up financial-sector laws to bring them in tune with current requirements, the Union Budget 2010-11 announced the setting up of the Financial Sector Legislative Reforms Commission (FSLRC). The Commission will examine the case for greater convergence of regulation and will streamline the regulatory architecture of financial markets. The Union Budget 2011-12 reinforced the setting up of the FSLRC.
The Commission would simplify and rewrite financial sector legislations, including subordinate legislations, to achieve harmony and synergy among them. This will remove ambiguity, regulatory gaps and overlaps among the various legislations making them more coherent and dynamic and help cater to the requirements of a large and fast growing economy in tune with the changing financial landscape in an inter-connected financial world.
The Commission will submit its report to the Finance Minister within 24 months, beginning March 2011.
The commission would include Justice (Retd.) B. N. Srikrishna Chairman, Justice (Retd.) Debi Prasad Pal Member, Dr. P.J. Nayak, K.J. Udeshi, Yezdi H. Malegam ,Prof. Jayant Varma, Prof. M. Govinda Rao, C. Achutan, Dhirendra Swarup Member Convenor, Joint Secretary, Capital Markets Nominee Member, C K G Nair is Secretary to the Commission.
The financial sector legislative reform commission (FSLRC) in its first meeting held on Apr 05 2011, headed by Justice BN Srikrishna, decided to form eight sub-committees that will look into areas such as banking, pension, insurance, capital markets, debt management office, forward markets and legal processes.