With a view to bridging regulatory gaps, the high-level panel tasked to re-write financial sector laws will take a call on nominating Forward Markets Commission (FMC) chairman on the Sebi Board, a senior Finance Ministry official said.

The Committee of Secretaries (CoS) had directed that heads of FMC and Sebi should be represented on each other's board so that there could be policy convergence of financial sector regulations relating to capital markets. As there is no provision for having a special invitee on the board of Sebi, the government will have to amend the Securities and Exchange Board of India (SEBI) Act, the official said, adding an opinion to this effect was also expressed by the Ministry of Law.

"In order to implement the CoS decision, the matter has been referred to Financial Sector Legislative Reforms Commission (FSLRC)," he added. FSLRC, chaired by Justice (retd) B N Srikrishna, was constituted in March this year to rewrite and streamline financial sector laws, rules and regulations in line with the economic liberalisation programme of the government.

There are over 60 Acts and multiple rules and regulations in the financial sector and many of them date back decades when the financial landscape was very different from what it is today. Moreover, the large number of amendments in financial sector Acts over the years have increased the ambiguity and complexity of the system.

The 10-member Commission was given 24 months to submit its report to the Finance Ministry.