Lok Sabha passes bill on new financial sector regulator

The Lok Sabha today passed the controversial Securities and Insurance Laws (Amendment and Validation) Bill 2010 paving the way for setting up the Financial Stability and Development Council (FSDC).

The bill provides for setting up of the FSDC, a joint mechanism headed by the finance minister, to resolve differences among the sectoral regulators such as SEBI, IRDA and PFRDA.

The bill seeks to amend the Reserve Bank of India Act, 1934, the Insurance Act, 1938 as also the Securities and Exchange Board of India Act, 1992.

Finance minister Pranab Mukherjee who piloted the bill lat week said the first stage of arbitration would be a high-level committee chaired by the governor of the Reserve Bank of India.

He said the bill in no way interferes with the monetary authority of the Reserve Bank of India, and would only impact its regulatory functioning.

"The new panel on financial disputes called the Financial Stability and Development Council (FSDC) will not be the super regulator," the minister said.