Source Business standard
| Sebi Ordinance may have to be promulgated again: FM |
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Mumbai, 14 December The Securities Law Amendment Ordinance, which seeks to give the regulator additional powers to deal with investment frauds and seeks to strengthen its ability to recover penalties as well as gather evidence, may have to be promulgated for the third time. An ordinance is a temporary legislative measure that is put in place till a law is passed in Parliament. The draft law is still stuck with a standing committee and may now require a third ordinance so that Sebi's new powers are not suddenly taken away, according to Finance Minister P Chidambaram, speaking at the National Stock Exchange's 20th anniversary celebrations in Mumbai. "The standing committee's report ought to have come on the opening day of Parliament. Today, we are on the 14th of December. This session of Parliament will end on the 20th of December and the standing committee has not yet given its report. If the report does not come in time and I am not able to pass the Bill to replace the Ordinance, then I am forced to do a nearly unprecedented thing of repromulgating an Ordinance for the third time," he said. There have been some previous cases of an ordinance being promulgated multiple times. The Depositories Ordinance of 1995 and the Industrial Disputes (Amendment) Ordinance of 1996 were promulgated four times each; according to Presidential Legislation in India, a book by Shubhankar Dam. The Ordinance gives Sebi the powers to conduct search and seizure operations. It has also provided for more powers to tackle investment frauds, in addition to ordering attachment of properties. The ordinance has been promulgated twice so far. The finance minister added the FSLRC ( Financial Sector Legislative Reforms Commission), which seeks to review and restructure the financial regulatory framework is also seeing progress. Among other things, the commission also examined the appropriate means of oversight of the regulators and their autonomy from the government. The non- legislative aspect of the recommendations are being implemented, he said. The government is adopting an approach which would make use of task forces in addition to consultations in a bid to tackle the legislative aspects of the bill as well. The minister feared that the forthcoming elections would throw up a fractured mandate. "I'm not sure that the elections will throw up a government with a solid majority…," he said. Finance Minister P Chidambaram speaks at an event marking the 20th anniversary of the National Stock Exchange in Mumbai on Saturday. PHOTO: PIB N20 YEARS OF THE NSE N |
Source Businessline
Centre to review RBI powers as part of financial sector reforms
OUR BUREAU
FSLRC non-legislative recommendations to be implemented: FinMin
MUMBAI DEC. 14:
Union Finance Minister P. Chidambaram on Saturday said the Government would review the powers vested with the RBI, in line with the recommendations of the Financial Sector Legislative Reforms Commission (FSLRC).
The Reforms Commission has proposed a financial regulatory mechanism comprising the RBI, Unified Financial Agency, Financial Sector Appellate Tribunal, Resolution Corp, Financial Redressal Agency, Public Debt Management Agency and the Financial Stability Development Council.
Under the proposed regulatory structure, the RBI will perform the functions of monetary policy, regulation and supervision of banking and payment systems. The Financial Stability Development Council will function in the systemic risk and development category.
"RBI is the monetary authority and will regulate banks. But all other functions should be revisited and we should ask ourselves whether RBI is the best authority to discharge those functions or is there any other authority in the system which can take over that function or is it necessary to create a separate authority," he said, addressing the 20th anniversary celebrations of the National Stock Exchange here.
A consultation-cum-taskforce approach was already on, he said, adding that the FSLRC report was a well-argued document and that many of its recommendations could be implemented.
"The Government will make a beginning by implementing the non-legislative recommendations of the Reforms Commission while simultaneously working on legislation," said Chidambaram. "It (passing legislation) will take time. It is a complex process. You do not know the trauma we undergo for getting Bills passed in Parliament," he added.
RUPEE VOLATILITY
Chidambaram outlined the importance of financial sector reforms to tackle the rupee volatility occurring due to higher volumes logged by the overseas non-deliverable forwards (NDF) market.
NDF market in rupee-foreign currencies is cash settled with no currency changing hands. It has a volume which is many times that of the domestic market for forwards.
"There is an urgent need to resolve the issues inhibiting the growth of the domestic currency derivative markets. Likely challenges with a launch of rupee derivatives on global exchanges should also be taken into account," he said.
Referring to the domestic underdeveloped bond market, he said, "When equities can be bought at every street corner where there is an NSE terminal, why can't one buy bonds? Where have we failed to use the same knowledge and infrastructure to develop bond markets?"
Infra institutions
Chidambaram made it clear that market infrastructure institutions (MIIs), which include exchanges, clearing corporations and depositories, needed to maintain the highest levels of ethics and probity.
(This article was published on December 14, 2013)
Keywords: Centre, review RBI powers, Financial Sector Legisl
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