The Securities and Exchange Board of India (Sebi) on Friday notified new norms empowering its chairman to order search and seizure operations during investigations.
The Securities Laws (Amendment) Second Ordinance, 2013, confers direct powers on chairman, Sebi, to authorise the investigating authority or any other officer of Sebi to search any premises where incriminating documents are lying and seize such documents for the purpose of investigation.
Sebi is now on par with other foreign securities regulators, including the US Securities and Exchange Commission (SEC), which can ask defaulters to pay disgorgement to repay ill-gotten gains to investors. However, the government has not yet granted powers to wire-tap, a function critical in prosecution, especially in insider trading cases, to Sebi. It can, however, seek call data records. The new norms providing Sebi with powers to conduct search and seizure have been finalised after taking into account suggestions from public and other stakeholders to draft regulations, which were issued in November 2013.
These regulations, which run into 24 pages, provide detailed procedures to be followed for issuance of warrants and execution of search and seizure orders, among others, while necessary safeguards have also been put in place to protect rights of affected persons. As per the new regulations, Sebi’s Investigating Officer would have to request the Sebi chairman for one or more warrants of authority for execution of search and seizure.