FM Arun Jaitley raises concerns about regulatory overlaps

Finance Minister Arun Jaitley said on Monday that active and responsive regulators ensure fair play but emergence of multi-sectoral regulators raises concerns about their crossing each other's jurisdictional areas.

Mergers and acquisitions (M&A) would continue to create big corporate conglomerates but there is a need to draw a red line to avoid dominance and curbing of open competition in market by them, Jaitley said while addressing a conference on competition issues in the national capital.

According to the Finance Minister, there is a need to have an active and responsive regulator. However, he cautioned about the growth of multi- sectoral regulators in recent times.

Jaitley was inaugurating the International Competition Network (ICN) Merger workshop in the national capital, organised by fair-trade regilator Competition Commission of India (CCI).

Stressing that people learn from global experiences, Jaitley said, "If two telecom majors are to amalgamate, will there be common turf areas between the telecom regulator and market regulator CCI. Therefore, how do you built the jurisdiction of the two. Obviously jurisdiction in this area is emerging."

Meanwhile, the government is in the process of implementing a large number of legislative and administrative recommendations of the Financial Sector Reforms Commission (FSLRC), which had suggested a major overhauling of financial sector regulations.

"As the change in process of reform continues... I have not the least doubt that a large number of these (FSLRC) recommendations will actually see implementation in the days to come," the Finance Minister had said last week.

FSLRC, chaired by Justice BN Srikrishna, has suggested a non-sectoral, principle-based approach to revamp the existing framework. Among various suggestions, the FSLRC has suggested creation of a unified financial sector regulator comprising te Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (Irda), Forward Markets Commission (FMC) and part of Reserve Bank of India (RBI).