A major overhaul of the financial sector rules in the country, as suggested by a government-appointed panel, may have to wait for the next government but non-legislative recommendations in this regard can be implemented even now, SEBI Chairman, U.K. Sinha, said here today.

In its report, the Financial Sector Legislative Reforms Commission (FSLRC) has recommended sweeping changes to the way financial sector is regulated in the country, including in areas ranging from banking and insurance to capital markets.

While not much progress has been made towards implementing the recommendations made in this report, which was submitted to the Government in March last year, Finance Ministry has now called for early implementation of the non-legislative proposals contained therein.

“ ...the legislative part of FSLRC cannot be done right now (and) it has to wait for the next government, but the non-legislative part can be implemented as some of them are more about procedures and principles,” SEBI Chairman told reporters here on the sidelines of an ANMI (Association of National Exchange Members of India) function.

The Commission was constituted in March 2011 to review and rewrite the legal institutional framework of financial sector laws and it was headed by retired Supreme Court judge B.N. Srikrishna.

Non-legislative recommendations of FSLRC

Earlier this week, the Finance Ministry had asked the regulators to voluntarily implement the non-legislative recommendations of FSLRC, while issuing a ‘guidance handbook’ on this matter.

“SEBI is keen on implementing the basic principles of the recommendations by FSDC,” Sinha said.

He also welcomed the recommendations about putting in place better regulation with lesser number of norms.

Finance Minister P. Chidambaram also said recently that India is in the process of deepening policy reforms in its financial sector and addressing the gaps in the overall regulatory architecture.

“Financial inclusion remains a very high priority for us, we had constituted the FSLRC to review and rewrite the legal-institutional framework of the Indian financial sector laws. Its recommendations are currently being examined for implementation,” he had said.

Fin Min's guidance handbook

According to the Finance Ministry’s guidance handbook, there are a number of recommendations in the FSLRC report which are in the nature of governance enhancing and do not require legislative changes.

“It has been decided that in the first instance financial sector regulators may voluntarily adopt the governance enhancing recommendations within a reasonably proximate timeframe,” it says.

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