Govt cracks down on ponzi schemes,gives Sebi powers to eavesdrop and more

Govt cracks down on ponzi schemes,gives Sebi powers to eavesdrop and more

Govt is arming the market watchdog to safeguard gullible investors from fraudsters.

The government today approved a proposal to amend Sebi Act for providing more powers to the market regulator to crack down on chit fund and ponzi schemes.

The decision,which will also give Sebi powers to conduct search and seizure operations and access call data records,was taken at a meeting of the Cabinet here,according to sources.

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Amendments to the Sebi Act and other relevant regulations were finalised after detailed consultations with the Securities and Exchange Board of India (Sebi).

Once the amendments come into effect,the regulator would have direct powers to carry out search and seizure operations and for attachment of assets,as part of efforts to crack down on ponzi schemes.

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Besides,Sebi would have powers to seek information,such as telephone call data records,from any persons or entities in respect to any securities transaction being probed by it.

The capital market watchdog has been seeking an overhaul of regulations as well as mandate for a long time,given the changing nature of the securities market in general,and newer tools being used by manipulators to take gullible investors for a ride,in particular.

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Among others,Sebi chairman would have the powers to authorise conducting of search and seizure.

Currently,Sebi can conduct search and seizure only after approval from the Chief Metropolitan Magistrate,but this provision is often seen as delaying proceedings and hampering the confidential nature of probe.