Bill to empower Sebi introduced in Lok Sabha

Aug 04 2014, 16:53 IST
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An ordinance to empower Sebi to deal with ponzi schemes was promulgated thrice during the previous UPA regime but the same could not be passed by Parliament to make it an Act. An ordinance to empower Sebi to deal with ponzi schemes was promulgated thrice during the previous UPA regime but the same could not be passed by Parliament to make it an Act.
SummaryA bill was today introduced in Lok Sabha to amend the securities market laws...

A bill was today introduced in Lok Sabha to amend the securities market laws that would give more teeth to Sebi to crackdown on fraudulent investment schemes, seek information from any entity related to a probe and also provide for setting of special courts to ensure speedy trial.

The Securities Laws (Amendment) Bill, 2014, aims to empower capital market watchdog Securities and Exchange Board of India (Sebi) by giving powers such as authority to seek call data records.

An ordinance to empower Sebi to deal with ponzi schemes was promulgated thrice during the previous UPA regime but the same could not be passed by Parliament to make it an Act.

The bill was introduced by Minister of State for Finance Nirmala Sitharaman as, she said, Finance Minister Arun Jaitley was unwell and could not attend the House.

Her clarification about Jaitley's absence came after some Opposition members wanted to know why the Finance Minister was not present as the bill was listed in his name.

"To protect the interests of investors and to ensure orderly development of securities markets, it has become necessary to enhance the powers of the Board," the government said, explaining the objects and reasons for the bill.

Once the bill becomes an Act, Sebi would have powers to call for information "not only from the people or entities associated with the securities market but also from persons who are not directly associated with the securities market".

Besides, the capital market watchdog would get increased powers to crack the whip on illegal investment schemes.

The bill aims to protect investors as well as curb fraudulent investment schemes thriving at the expense of gullible investors.

"Further, in view of large pendency of cases, it is necessary to constitute Special Courts for prosecution of offences under the securities law to provide speedy trial," the government said.

As per the bill, any unregistered scheme having a corpus of Rs 100 crore or more would be deemed as a collective investment scheme.

Instead of First Class Judicial Magistrate, the Magistrate or Judge of such designated court in Mumbai -- as notified by the central government -- would have jurisdiction to issue an order "for the seizure of books, registers, other documents and records".

Sitharaman also introduced bills to amend Securities Contracts (Regulation) Act, 1956 and Depositories Act, 1996.

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