In the last post, I had discussed the unusual ordinance brought about to resolve the dispute in jurisdiction of ULIPs. The ordinance does another thing. It introduces a dispute resolution mechanism between four regulators - the insurance, the banking, the securities and the pension fund. However, the disputes in scope only relate to the definition and jurisdiction of financial instruments - securities, repos, derivatives etc.
Is this committee a good idea? It may be a good idea for the very short term, but is too ad hoc for meaningful long term issues. The problems with the committee formed are:
a) it is created by way of ordinance, so it will lapse - it is therefore temporary by its nature.
b) It creates powerful tensions between the will of the parliament in creating autonomous regulators and the will of the executive in resolving disputes by way of executive ordinance. Ideally, both mechanisms ought to be statutory because the executive should not interfere with the will of the legislature which chose not to create a dispute resolving mechanism.
c) It is of limited jurisdiction in its scope. What happens to other issues to resolve besides the jurisdiction and definition of instruments?
d) What happens to the talk shop known as HLCC and what happens to the plan to introduce FSDC as proposed in the budget to resolve issues between regulators. Ideally, the ad hoc committee must give way to a well thought out FSDC which resolves issues and it has teeth - but the FSDC must have real teeth like the committee.
No comments:
Post a Comment