Empowering SEBI: Cabinet to consider Bill next week

Shishir Sinha New Delhi | Updated on March 12, 2018 Published on July 15, 2014

Provisions on search and seizure are likely to be tweaked

The Union Cabinet is expected to consider the Securities Laws (Amendment) Bill next week. The Bill will replace an ordinance which is due to lapse on July 18.

Some redrafting likely

“Effort is on to introduce the Bill as soon as possible with some changes,” a Senior Finance Ministry official told BusinessLine. Although, the official did not specify the changes, it is believed that provisions relating to search and seizure as well as penalty are likely to be redrafted.

The Bill intends to empower the market regulator SEBI to act against Ponzi and illegal deposit schemes, besides providing power to search and seizure and assessing call data records in securities-related offences.

Now the Cabinet has to take a call on continuation of the power as prescribed in the ordinance. The new Bill will also have validity clause from the date on which the ordinance lapses. The regulator has already notified some regulations on the basis of the ordinance.

Failed attempts

The previous Government did introduce the Bill but failed to get it passed in the House which resulted in the ordinance being promulgated twice. However, with the end of 15th Lok Sabha, the Bill also lapsed. This has necessitated the new Government to work for its re-introduction. The Government has listed this Bill among the legislations to be brought in during the ongoing session of Parliament which is scheduled to end on August 14.

There have been a lot of political differences, especially on the search and seizure power, which resulted in the Parliamentary Standing Committee on Finance not being able to present its report on the Bill in the 15th Lok Sabha.

Even during the polling process, when the erstwhile Government approached the Election Commission for re-promulgation of the Bill, over 40 Members of Parliament wrote to the Commission requesting not to permit it. Many among these 40 have got re-elected to the new Lok Sabha.

Those, who oppose the provision of search and seizure, argue that such sweeping powers should not be allowed to continue.

Meanwhile, the latest ordinance, re-promulgated on March 28, made an amendment. It said that the SEBI Chairman will record reasons in writing while issuing an order for search and seizure. It was also said that the authorised officer may requisition the services of a police officer or any officer of the Central Government to assist him in the search and seizure. Another new provision empowers the SEBI board to recall and enhance the penalty imposed by the adjudicating officer.

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Published on July 15, 2014
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