The amendments will give Sebi powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it.The amendments will give Sebi powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it. ET SPECIAL: NEW DELHI: The government passed an ordinance late on Thursday night to empower the securities market watchdog to effectively regulate all collective schemes of corpus of over Rs 100 crore. The emergency law, which will have to be approved by the parliament when it convenes for the monsoon session next month, will give Sebi powers to attach assets if its directions are ignored. In addition, the Sebi chairman will have powers to authorise search and seizure operations to clamp down on ponzi schemes. President gave his approval to the ordinance on Thursday. The union cabinet had approved changes to the law on Wednesday. The ordinance will "amend Securities and Exchange Board of India (Sebi) Act and related Acts for providing more powers to the capital markets regulator for enforcement against illegal Collective Investment Schemes and to curb insider trading" the finance ministry said in a statement on Thursday. The amendments will give Sebi powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it. The ordinance will also enable setting up of Special Courts to fast-track the resolution of pending Sebi related cases. "Government believes that these amendments would give Sebi the legal backing to clamp down on unscrupulous entities that are using newer methods to take gullible investors for a ride," the statement said. The urgency to bring collective schemes under the regulatory oversight follows that Saradha Group chit fund scam in West Bengal. "Owing to new and innovative methods of raising funds from investors, such as art funds, timeshare funds, emu /goat farming schemes, there has been regulatory gap /overlap regarding types of instruments / fund raising," finance ministry said explaining the rationale of the changes. The updated law will ensure that every kind of fund raising from the public comes under the jurisdiction of Sebi Collective Investment Scheme regulations. The finance ministry said the amendments to the SEBI Act, SCR Act and the Depositories Act were finalised after detailed consultations with Sebi, ministry of home affairs, department of telecom, ministry of corporate affairs and the department of financial services.
Posted on: Sun, 21 Jul 2013 08:35:29 +0000
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