Attributing the differences between SEBI and IRDA over administration of ULIPs to regulatory gaps, the Planning Commission on Wednesday said the establishment of the Financial Development and Stability Council (FSDC) will help in resolving such issues.
Speaking on the sidelines of a function, Planning Commission Deputy Chairman Montek Singh Ahluwalia also said that differences between the two warring regulators have not caused any uncertainty in the market.
“I don’t think there is any uncertainty in the market. This (regulatory dispute) happens all over the world”, he told reporters, replying to questions on the ongoing turf war between SEBI and IRDA.
As regards the proposed FSDC, Mr. Ahluwalia said it would “rework the system to close these (regulatory) gaps“.
Finance Minister Pranab Mukherjee in his Budget speech proposed to set up the council to address “inter-regulatory coordination” issues. The government, however, has yet to finalise the structure of the FSDC.
The dispute between SEBI and IRDA relates to who should regulate ULIPs, a hybrid investment instrument which are issued by life insurance companies.
Describing the issue as “complex and legal”, Mr. Ahluwalia further said, “I think the matter has been resolved... One of the major problems in the financial sector is that different parts of the financial systems have developed in different times, so there are always regulatory gaps.”