SEBI’s search, seizure power to continue, but after court nod

Our Bureau New Delhi | Updated on March 12, 2018

The Securities and Exchange Board of India will continue to have search and seizure power against manipulators and fraudsters, but with a rider.

The Union Cabinet on Thursday approved a revised Bill for empowering the regulator, which will also help in curbing the menace of Ponzi and illegal deposit schemes.

“One of the new provisions prescribes taking approval from a court before ordering search and seizure,” a senior Government official told BusinessLine.

Mumbai-based court

The official said the court will be based in Mumbai and will consider applications from the regulator for action in any part of the country. This will thwart any attempt being made by a person or company to get a stay order from a local court. Once the request is accepted, a team positioned at the location will act, he added.

The Securities Laws (Amendment) Bill will replace an Ordinance, which was promulgated thrice by the previous UPA Government.

The Government will now introduce the Bill during the ongoing session of Parliament and try to get it passed lest the Ordinance lapses.

This provision of taking approval from a court has been made in response to criticism alleging ‘sweeping powers’ given to SEBI. In fact, while promulgating the Ordinance on March 28, the UPA Government had added a provision that the SEBI Chairman will record the reasons in writing while issuing an order for search and seizure.

The revised draft also has clearer provisions for penalty. The rest of the provisions of the Ordinance have been retained in the revised Bill, including assessing call data records in security-related offences, registration of money pooling schemes involving ₹100 crore or more, attachment of properties and setting up special courts for trial of offences.

Published on July 24, 2014

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