Parliament passes Bill to resolve disputes between financial regulators

NEW DELHI: Parliament on Monday passed a Bill that provides a mechanism, headed by the finance minister, to resolve disputes between financial regulators as an ad-hoc arrangement.

"The government is still working on a permanent body to settle the inter-regulator disputes such as the SEBI-IRDA turf war," finance minister Pranab Mukherjee said.

"It is not a knee-jerk reaction, it is ad hoc arrangement," he said in the Rajya Sabha while replying to a debate on the Securities and Insurance Laws (Amendment and Validation) Bill, 2010.

"The Bill provides for a joint mechanism to resolve the disputes between different financial regulators. However, before the dispute is placed before the joint mechanism, it would, like in the past, go to the high-level coordination committee headed by RBI governor," he said.

Mukherjee said the government had to issue an ordinance on June 18 ensuring

such a mechanism, in the wake of a turf war between stock market regulator SEBI and insurance watchdog IRDA over the jurisdiction of the popular ULIP.

Allaying apprehensions of BJP members on government interference in the autonomy of RBI and financial regulators, he said there was no such intention. "What do you expect me to do, will I remain a mute spectator, if they (regulators) quarrel like petulant children? My concept of autonomy is not like that. It is not good for the economy," he explained.

Mukherjee said with a growing economy, there would be more regulators in different sectors, and there could be possibilities of inter-regulator disputes. Hence, there should be a permanent mechanism to settle such disputes.

The government has already floated a discussion paper on the proposed Financial Stability Development Council (FSDC). As the paper has been placed in the public domain, it is being debated whether FSDC would have statutory powers or not.

Read more: Parliament passes Bill to resolve disputes between financial regulators - India - The Times of India http://timesofindia.indiatimes.com/india/Parliament-passes-Bill-to-resolve-disputes-between-financial-regulators/articleshow/6283935.cms#ixzz0wBJGOfZC