18 July 2013
NEW DELHI: The government on Wednesday cleared a proposal to amend the Securities and Exchange Board of India (Sebi) Act of 1992 to give the market regulator powers to access call data records of individuals and companies, and carry out search and seizure operations.
The amendments, approved by the Union Cabinet, aim to protect investors from ponzi schemes such as the Saradha chit fund. According to officials, the amendments will empower the Sebi chairman to ask for call records of individuals and entities in connection with any securities transaction that is under investigation. They will also give the Sebi chief powers to order search of a suspected company or individual's premises, besides enhancing the limit of penalty imposed by Sebi.
The amendments to the Sebi Act and other relevant regulations were finalised after detailed consultations with Sebi, officials said. At present, Sebi has to seek approval of a Chief Metropolitan Magistrate for conducting any search or seizure, which often delays proceedings. The government will now introduce the Securities Laws (Amendment) Bill in Parliament.
Following the Saradha scam, the government had set up earlier this year a high level inter-ministerial group to suggest stricter regulations to prevent such scams. The group had representations from the Revenue and Economic Affairs Department in the finance ministry, ministry of corporate affairs, Reserve Bank of India and Sebi.
Published by: The Economic Times