Ponzi plans: Sebi gets more power
NEW DELHI: President Pranab Mukherjee
has cleared the re-promulgation of an ordinance that gave more powers
to the Securities and Exchange Board of India (Sebi) to crack down on
unauthorized fund mop-up and ponzi schemes, besides allowing search and seizure operations.
It also provides the capital markets regulator with powers to scan call
records, attach bank accounts and property and arrest a person, who
does not comply with Sebi orders.
The ordinance, which was
first promulgated last year, could not be cleared by Parliament as the
standing committee on finance did not submit its report. While the
finance ministry was keen that it should be given a fresh lease of life,
the Cabinet could not approve it before the Election Commission
announced the general elections amid controversy over the UPA coalition
pushing through some other legislations through the backdoor, something
that the President was unwilling to back.
But, given the sensitivity
of the Sebi Ordinance, the government managed to first impress upon the
Election Commission, which approved the proposal on Wednesday. Moving
in quickly, the Cabinet okayed it on Thursday and the decision was
endorsed by Mukherjee earlier on Friday.
Sources familiar with
the development said the ordinance is going to be formally notified
later in the evening and will allow the market regulator to perform its
duties till it is ratified by Parliament. A ratification is now only
possible once the Lok Sabha is sworn in and if the proposal continues to
enjoys the new government's support.
In the wake of the
Saradha scam, Sebi was given powers last year through an ordinance,
which was first promulgated in July and again in September, but it
lapsed as a bill in this regard could not be passed in Parliament.
Sources said that it was after much convincing that the President agreed
to the proposal. "Unlike the other ordinances related to
anti-corruption, this one is meant to protect investors," said a source
source - times of india
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Sources familiar with the development said the ordinance is going to be formally notified later in the evening and will allow the market regulator to perform its duties till it is ratified by Parliament. A ratification is now only possible once the Lok Sabha is sworn in and if the proposal continues to enjoys the new government's support.
In the wake of the Saradha scam, Sebi was given powers last year through an ordinance, which was first promulgated in July and again in September, but it lapsed as a bill in this regard could not be passed in Parliament. Sources said that it was after much convincing that the President agreed to the proposal. "Unlike the other ordinances related to anti-corruption, this one is meant to protect investors," said a source
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