The Central Government on Thursday constituted the Financial Sector Legislative Reforms Commission (FSLRC) under the chairmanship of former Justice B. N. Srikrishna to rewrite and harmonise financial sector legislations, rules and regulations.

“The resolution notifying the constitution of Financial Sector Legislative Reforms Commission (FSLRC) was issued on Thursday,” an official statement said while noting that the commission has been set up in pursuance of Finance Minister Pranab Mukherjee's budget announcement last year which was made with a view to rewriting and streamlining the financial sector laws, rules and regulations to bring them in harmony with the requirements of the country's fast growing financial sector.

Apart from Justice Srikrishna as the head, other members of the 11-member commission include former PFRDA Chairman D. Swarup, former Axis Bank chief P. J. Nayak and PMEAC member M. Govinda Rao. Headquartered in Delhi, the commission is to hold its first meeting on April 5 and submit its report to the Finance Minister within 24 months.

As for the terms of reference, the commission will examine the architecture of the legislative and regulatory system governing the financial sector in the country and also look at the most appropriate means of oversight over regulators and their autonomy from the government.

Alongside, it will also “examine if legislation should mandate statement of principles of legislative intent behind every piece of subordinate legislation to make the purposive intent of the legislation clear and transparent to users of the law and to the courts.”

This apart, the commission will examine the feasibility of whether public feedback for draft subordinate legislation should be made mandatory, with exception for emergency measures and also “examine the interplay of exchange controls under FEMA and FDI policy with other regulatory regimes within the financial sector.”

According to the statement, there are over 60 Acts and multiple rules and regulations dealing with the financial sector and many of them have become archaic.

“Large number of amendments made in these Acts over time has increased the ambiguity and complexity of the system,” it said.

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