President promulgates Ordinance to provide more powers to SEBI

NEW DELHI, July 19: President Pranab Mukherjee has promulgated an Ordinance to provide more powers to the Securities and Exchange Board of India (SEBI) to tackle fraudulent investment schemes.

President Pranab Mukherjee has promulgated the Securities Laws (Amendment) Ordinance, 2013 on July 18, a Rashtrapati Bhawan spokesperson said today.

The Ordinance also provides more powers to SEBI to monitor call data records of persons or companies suspected of any wrongdoing.

The SEBI would now have powers to regulate any pooling of funds under an investment contract involving a corpus Of Rs 100 cr or more.

Also, it would have power to attach assets in case of  non-compliance.

Chairman SEBI would have powers to authorise the carrying out search and seizure operations, as part of efforts to crack down on Ponzi Schemes.

The Union Cabinet had on July 17 approved the proposal to give more powers to the market regulator, for enforcement against illegal collective investment schemes and to curb insider trading.

Owing to new and innovative methods of raising funds from investors, such as art funds, time-share funds, emu /goat farming schemes, there has been regulatory gap/overlap regarding types of instruments/fund raising.

At the same time, SEBI receives complaints against unapproved fund raising activities of certain companies that claim that they do not come under the purview of SEBI Collective Investment Scheme regulations. With the amendments in force now, SEBI would have powers to regulate any pooling of funds under an investment contract involving a corpus of Rs 100 Crore or more, attach assets in case of non-compliance and Chairman SEBI would have powers to authorise the carrying out of search and seizure operations, as part of efforts to crack down on ponzi schemes.

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 investigated by it.

Establishment of Special Courts enabled by this Ordinance would fast-track the resolution of pending SEBI related cases.

These amendments to the SEBI Act, SCR Act and the Depositories Act were finalised after detailed consultations with SEBI and other Ministries and Departments including MHA, DoT, MCA, DFS etc.

The Government believes that these amendments would give SEBI the legal backing to clamp down on unscrupulous entities that are using newer methods to take gullible investors for a ride.

The promulgation of the Ordinance demonstrates the firm commitment and resolve of the Government to act with speed and alacrity to curb irregularities and frauds in securities market.  (UNI)