Parliament passed the Securities Laws (Amendment) Bill here on Tuesday, which provides the market regulator Securities and Exchange Board of India, with some more strength to deal with the rising number of fraudulent investment schemes in the country.

Replying to the debate on the Bill, Finance Minister Arun Jaitley said the Government was keen to crack down on the mushrooming Ponzi schemes and the new Bill would empower SEBI. He said multi-level marketing schemes would also be covered under the new law.

“The Act has been fine-tuned and new architecture with a wider language has been introduced... SEBI has no power to tap telephone... SEBI can call for information on call data records. The power to bug or intercept is not given to SEBI within the Act,” Jaitley said.

In the new law, SEBI will not have powers to conduct search and seizure operations without prior permission. “This is too arbitrary a power... Therefore, this power had to be tapered down,” he said.

Jaitley maintained that the new law will not overlap the jurisdictions of other laws and authorities. “What comes under Companies Act should be exempted from SEBI Act... There is no overlapping of jurisdiction,” Jaitley said.

He added that the new formula of penalties was to avoid harsh punishment for negligible offences. “The penalty has to be proportionate with the crime. You don’t use a hammer to kill a fly,” Jaitley said.

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