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Bill to empower Sebi introduced in Lok Sabha

Previous UPA government sought to empower the market regulator through the Ordinance route but failed to get the Sebi Bill passed in Parliament.

By: ENS Economic Bureau | New Delhi |
August 5, 2014 1:43:41 am

Almost 10 days after the Cabinet approved the Sebi Bill that seeks to empower the capital markets regulator to conduct search and seizure, access to call data records and crack down on ponzi schemes and investment frauds, the Bill moved a step closer to becoming law as it was introduced in the Lok Sabha on Monday.

Sebi currently enjoys the powers provided in the Bill as a result of an Ordinance promulgated by the President for the third time in March, 2014. The Ordinance will lapse if Parliament fails to pass the Bill in its ongoing session.

On Monday, the Bill was introduced by minister of state for finance Nirmala Sitharaman in the absence of the finance minister Arun Jaitley.

Explaining the object and reasons for the bill, the government 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.”

While there is a large pendency of cases the government stated that, “It is necessary to constitute Special Courts for prosecution of offences under the securities law to provide speedy trial.” 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”.

The previous UPA government sought to empower the market regulator through the Ordinance route but failed to get the Sebi Bill passed in Parliament.

‘Norms to deal with wilful defaulters’

Mumbai: The Securities and Exchange Board of India (Sebi) will soon come out with guidelines to tackle the menace of rogue borrowers — wilful defaulters — in the system. Sebi is in consultation with the Reserve Bank of India on regulations to curb wilful loan defaults and will be finalising norms on the same soon, Sebi chairman UK Sinha said.

“We are in consultation with the Reserve Bank of India for finalising the wilful defaulter regulations,” Sinha told reporters on the sidelines of an event at the BSE here.

The RBI which has been mulling a ban on capital raising activities by such entities is devising ways of sharing real time information on such activities with the Sebi. There has been a steep jump in defaults in the recent times. While many of the cases are due to systemic stress due to the economy’s poor show, there have been cases of wilful defaults by company promoters as well. ENS

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