With Parliament still in session, not having been prorogued, the Government is likely to face a logjam on the re-promulgation of the securities laws ordinance, say legal experts.
The ordinance, which lapses on January 15, provides powers for the SEBI Chairman to authorise investigating authority or any other officer of the regulator to conduct search and seizure under the SEBI Act and crack down on Ponzi schemes.
As long as Parliament is in session, the Government cannot re-promulgate an ordinance, they say. The Lok Sabha Speaker Meira Kumar had on December 18 last year adjourned the Lower House
The Government would have to get the pending Bill to replace the ordinance passed by January 15 — when the life of this ordinance is set to expire. This is unlikely, given that there is no move to reconvene the Lower House in the next few days.
If the Bill cannot be passed, the Government may have no other option but to wait for Parliament to get prorogued and then come out with another ordinance on the same issue, informed sources said.
All indications are that the second securities laws ordinance — promulgated in mid-September 2013 — will lapse in mid-January.
Meanwhile, the Finance Ministry has sought opinion of the Law Ministry on the possibility of re-promulgation.
FORCE OF LAW The bigger implication of any lapse of this second ordinance is that all the regulations framed under the power of this ordinance will lose the force of law.
One such significant regulation relates to conferring SEBI with search and seizure powers. The SEBI board had in the last week of December approved regulations on search and seizure on the basis of the powers derived from the ordinance.
Before this ordinance, the SEBI Act did not confer any explicit powers on SEBI to conduct search and seizure operations.
President Pranab Mukherjee had on July 18, 2013, promulgated an ordinance to amend the SEBI Act to give additional powers to SEBI.
It was re-promulgated on September 16 last year.