New Bill in Lok Sabha to give SEBI more teeth
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A Bill to further empower the Securities and Exchange Board of India (SEBI) to check fraudulent investment schemes, to call for documents on entities under probe and provide for constitution of special courts to expedite the cases was introduced in the Lok Sabha.
It is essentially a Bill that was conceived by the UPA government. An ordinance to empower SEBI to deal with ponzi schemes was promulgated thrice during the previous UPA regime. However, a Bill to replace the ordinance could not be done in Parliament.
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. It 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.
The objects and reasons listed by the government on the Bill said, “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”.
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.
“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. It envisages that 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”. (The Hindu)
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