Joins RBI, Sebi in trying to protect autonomy of the regulators.
Yet another regulator plans to oppose the Union finance ministry's move to set up a ‘super-regulator’ committee to deal with differences among the regulators.
The Insurance Regulatory & Development Authority (Irda) says it is against the panel, though the trigger for the government move was the tug of war over the supervision of unit-linked insurance plans (Ulips), with the Securities and Exchange Board of India (Sebi) trying to take it away from Irda and the inability of the two to settle the affair amicably. The finance ministry finally intervened on the side of Irda.
Irda joins the Reserve Bank of India and Sebi in trying to protect the autonomy of the regulators. The fourth, the Pension Fund Regulatory & Development Authority (PFRDA), is yet to decide on its stance, Chairman Yogesh Agarwal said.
| FOR THE SAKE OF AUTONOMY |
| * Panel was proposed in the June 18 ordinance |
| * Trigger was Irda-Sebi turf war over Ulips |
| * Irda yet to convey its stance to FinMin |
| * Ordinance will lapse if a bill is not brought in the monsoon session |
“We are not in favour of the formation of this joint committee, as it would have statutory powers and its decisions binding on all the regulators,” said a senior Irda official.
Irda has, however, not conveyed its stance to the ministry so far.
While ruling in favour of Irda in its turf war with Sebi over Ulips, the government had brought in an ordinance on June 18 which sought to form a joint committee.
Sebi had contented that Ulips should come under its jurisdiction, since the investment component in the instrument was high, with only a small portion of insurance, but Irda claimed it had the power to govern Ulips under the Irda Act.
Though the matter went to the High Level Coordination Committee on Financial and Capital Markets (HLCC), there was a stalemate between Irda and Sebi. To avoid a similar recurrence, the government had proposed to form a joint committee, to be headed by the finance minister, with two government officials and the four regulators as members.
RBI Governor D Subbarao on July 12 met Finance Minister Pranab Mukherjee and expressed his reservations over formation of the committee. Reports suggest Sebi has also written to the government against the formation of this panel.
However, if the government does not bring a bill to this effect in the monsoon session, the ordinance will automatically lapse. In that case, the existing HLCC, headed by the RBI governor, will remain the nodal authority for coordination among the regulators.
