Government of India Volume I: Analysis and Recommendations

SUMMARY OF RECOMMENDATIONS NOT EMBEDDED IN THE DRAFT CODE
16.5. Systemic risk
The FSDC has been given the power to formulate and implement certain system-wide
measures which seek to mitigate systemic risk in the financial system. Regardless of any
independent action of the FSDC in relation to research on new system-wide measures,
the Commission recommends that the Central Government should undertake a formal
review in relation to this issue in five years.
16.6. Transition issues
The Commission recommends that the Central Government should consider establishing
a focused project team within the Ministry of Finance to manage the overall transition
process.
In the view of the Commission, the tasks of the project team would be to:
1. Create and implement an overall blueprint for the transition to the new legal framework;
2. Support the legislative process in the analysis and processing of the draft Code;
3. Undertake research and capacity building that is required prior to the new activities of regulatory
agencies;
4. Undertake systems analysis, design and prototyping for the IT systems that would be required in
establishing new functionality and new agencies;
5. Enable information flows and co-ordinate with all relevant departments or agencies of the government,
including existing regulators;
6. Determine the manner in which pending bills and existing regulations will be phased out and the
timing and sequencing of the draft Code coming into effect;
7. Incorporate, to the extent possible, the Commission’s recommendations on regulatory governance
within the existing regulators;
8. Create an “Interim Co-ordination Council” of the existing agencies that are to be merged to create
the UFA; and
9. Identify the steps to be taken to ease the transition process for regulated entities, such as exemptions
from capital gains tax or stamp duty requirements.
FINANCIAL SECTOR LEGISLATIVE REFORMS COMMISSION 143