Cabinet nod for amendment to give SEBI more teeth
18 Jul 2013
The government today approved a proposal to amend the SEBI Act to give the market regulator more powers to crack down on Ponzi schemes, which collect money from small investors on the specious promise of large returns.
The decision, which will give the Securities & Exchange Board of India powers to conduct search and seizure operations and access call data records, was taken at a meeting of the union cabinet in New Delhi on Wednesday.
Amendments to the SEBI Act and other relevant regulations were finalised after detailed consultations with the regulator.
After the amendments come into effect, SEBI will be able to directly carry out searches and seizures and attach assets. It would also be able to demand information such as phone records from any persons or entities in respect to any securities transaction it is investigating.
SEBI has been seeking such amendments, including the expansion of its workforce, for some time now, in view of the changing nature of the securities market in general, and newer tools being used by manipulators.
At present SEBI can conduct search and seizure only after approval from a chief metropolitan magistrate, which can delay proceedings and hamper the confidentiality of the probe.
