New Delhi: The government-appointed panel on legislative reforms today said it will suggesting a sunset clause for various sectoral regulators like Sebi and IRDA so that a super regulator can be set up for the financial sector.
"The sunset clause is in the mind of the commission. It will be part of the final report," Financial Sector Legislative Reforms Commission Chairman former Justice B N Srikrishna told reporters here.
The provision would enable laws pertaining to financial sector to be reviewed at regular interval and introduce necessary changes, he said, adding the Commission would submit its final report by March next year.
"It could be said in the law itself (about the sunset clause)...Saying that law can expire on such and such date," he said.
When asked what should be the ideal timeframe for review, "It could be 10 years or more."
Earlier this week, the Commission published an Approach Paper proposing a single regulator called unified financial agency (UFA) for the financial sector which would subsume the functions of key agencies like SEBI, IRDA, PFRDA and Forward Markets Commission (FMC).
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.
It has also suggested creation of a financial redressal agency (FRA) to address consumer complaints against companies across the financial sector.
As regards the Reserve Bank, the Commission said the central bank should focus on monetary policy, ensure consumer protection law in the fields of banking and payments. It would remain a separate regulator.
At appropriate time, the government may also consider RBI merging into UFA, he said, adding, it has not been decided by when it can be done.
Under the existing architecture, the financial sector is regulated by eight agencies which are RBI, Sebi, IRDA, Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC), Securities Appellate Tribunal (SAT), deposit insurance agency DICGC and Financial Sector Development Council (FSDC).
As per the proposal, there would be five new agencies besides Reserve Bank and FSDC. The new ones would be UFA, FSAT, FRA, DMO and Resolution Corporation.
"The unification of regulation and supervision of financial firms such as mutual funds, insurance companies, and a diverse array of firms which are not banks or payment providers, would yield consistent treatment in consumer protection and micro-prudential regulation across all of them," the Paper said.