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Various Acts & Rules »
 Customs Tariff 2009-10 - PART-II - Chapter 98 - Project imports, Laboratory chemicals, passenger's baggage
 Customs Tariff 2009-10 - PART-II - Chapter 97 - Works of art, collectors' pieces and antiques
 Customs Tariff 2009-10 - PART-II - Chapter 96 - Miscellaneous manufactured articles
 Customs Tariff 2009-10 - PART-II - Chapter 95 - Toys, games and sports requisites; parts and accessories thereof
 Customs Tariff 2009-10 - PART-II - Chapter 94 - Furniture; bedding, mattresses, mattress supports
 Customs Tariff 2009-10 - PART-II - Chapter 93 - Arms and ammunition; parts and accessories thereof
 Customs Tariff 2009-10 - PART-II - Chapter 92 - Musical instruments; parts and accessories of such articles
 Customs Tariff 2009-10 - PART-II - Chapter 91 - Clocks and watches and parts thereof
 Customs Tariff 2009-10 - PART-II - Chapter 90 - Optical, photographic, cinematographic, measuring
 Customs Tariff 2009-10 - PART-II - Chapter 89 - Ships, boats and floating structures
 Customs Tariff 2009-10 - PART-II - Chapter 88 - Aircraft, spacecraft, and parts thereof

Tax & regulations rules must converge
January, 29th 2010

Is the debate on a single regulator really worthwhile? We do have various players in different sectors who are regulated by four regulators in the  financial sector. There are overlaps in product design, distribution channels and arbitrages in the areas of capital and channel reward systems.

All the players mobilise household savings from a common pool. Banking companies have an elaborate distribution system of their own through their branch-network and their employees. Asset management companies (AMCs) have an open architecture distribution arrangement . The brokers who sell these products earn their fees from investors and are expected to be loyal to them.

Insurance firms, on the other hand, use a substantial direct agency channel that engages more than three million people. AMCs and insurers also depend on the banking system for their distribution through their bank assurance channel.

Earlier on, Unit Linked Insurance Plans (ULIPs) were designed by an AMC. The element of protection cover on a back to back was written by the life insurer.

With the emergence of private sector insurance companies , we now have insurers who have designed ULIPs and are mobilising savings through these products.

Despite the issues of the regulatory arbitrages, the financial services sector benefits through the optimum utilisation of distribution channels through innovative products which may overlap and fall within the jurisdiction of more than one regulator.

There is nothing unusual about this. It does happen in many markets and there can be an efficient coexistence of different players as long as the larger purpose of mobilizing savings is served.

We do have, perhaps, peculiarities in the overlap due to a very flat tax incentive system. It does not distinguish or encourage savings in regards its size and the maturity period to any effective extent .

What we do need is convergence of regulation rather than debate over the issue of a single regulator. The tax incentive structure should also go hand in hand with such a converged plan.

 
 
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