President promulgates ordinance to provide more powers to SEBI
Business & Economy

President promulgates ordinance to provide more powers to SEBI

NetIndian News Network

New Delhi, July 18, 2013

President Pranab Mukherjee today promulgated an ordinance to amend the Securities and Exchange Board of India (SEBI) Act and related Acts to provide more powers to the capital markets regulator for enforcement against illegal collective investment schemes and to curb insider trading.
This was consequent to the approval given by the Union Cabinet at its meeting yesterday to amend the securities laws.
An official press release said that, 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 and overlap regarding types of instruments and 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 the Chairman SEBI would have powers to authorize 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, the release said.
These amendments to the SEBI Act, SCR Act and the Depositories Act were finalized after detailed consultations with SEBI and other Ministries and Departments including the Ministry of Home Affairs, the Department of Telecommunications, the Ministry of Corporate Affairs and the Department of Financial Services.
"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," the release added.
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