Cabinet OK for Competition Act changes
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The government today expanded the ambit of Competition Commission of India (CCI), with an amendment to the Competition Act, following which all sectors would fall under the purview of the fair trade regulator.
Approving a proposal by the Ministry of Corporate Affairs in this regard, the Union Cabinet this evening decided to amend the Competition Act, 2002 with a view to fine tune the regulations to bring it at par with the prevailing scenario and in light of the experiences gained over the past years.
Under the proposed amendments, no sector would be exempted from the purview of the CCI, Finance Minister P Chidambaram told reporters after the Cabinet meeting.
Earlier, there have been requests for exempting merger and acquisition deals in sectors like banking and insurance from seeking approval from CCI.
The fair trade regulator has a mandate to ensure that the merger and acquisition deals between various entities do not lead to situations that affect competition in the marketplace.
Chidambaram said all voluntary merger and acquisition (M&A) deals would come under the CCI's jurisdiction.
However, in cases like deals involving ailing banks or insurers, the views of sectoral regulators (RBI and IRDA) would be taken into account.
According to an official release on cabinet decision, the Corporate Affairs Ministry's proposal, after its initial consideration in April 2012, was referred to a Group of Ministers to examine it in detail, particularly in reference to role of sectoral regulators on competition-related issues.
The Finance Minister said that all voluntary M&A deals would come under the CCI's ambit.
"Voluntary mergers will come under the competition Act, involuntary mandated mergers, amalgamations mandated by the RBI in the case of banks mandated by the IRDA in case of insurance companies...We are asking for exemption. It will be in the Act," Chidambaram said.
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