The Government is likely to re-promulgate the ordinance to empower the Securities and Exchange Board of India (SEBI) to crack down on ponzi schemes and access call data records.
This move is necessary especially after the Saradha scam in West Bengal highlighted the regulatory gap and overlap in curbing fraudulent investment schemes.
Besides, insider trading in the equity markets also needs to be curbed more effectively. The ordinance intends to give more powers to the capital market regulator in dealing with these issues.
“The ordinance is lapsing on September 19 and as warranted by the situation, it can be re-promulgated,” a senior Finance Ministry official told
Since Parliament could not pass the Securities Laws (Amendment) Bill 2013 in its recently-concluded session, there is a need to re-promulgate the ordinance.
Though, this Bill was listed for consideration and passage in the list of business for Lok Sabha last week, other legislations got priority.
The President promulgated an ordinance to amend the Securities Laws on July 18, after the Cabinet, on July 17, gave its approval to amend the SEBI Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Depositories Act 1996 for providing more powers to the capital markets regulator to curb Ponzi schemes and insider trading.
Article 123 of the Constitution says that the President can promulgate an ordinance between two sessions of Parliament, if the matter requires immediate action. An ordinance has the same force and effect as an Act of Parliament.
However, it needs to be approved by both houses of Parliament in the next session. Once this happens, the ordinance gets replaced by an Act.
Otherwise, the ordinance expires six weeks from the time Parliament begins its session. The monsoon session began on August 5.