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Sebi can now Hike its Penalties; Police to Help in Searches
With re-promulgation of the much-awaited Securities and Exchange Board of India (Sebi) ordinance, the market regulator can now enhance its own penalty against defaulters within three months while it can avail the services of police and central government officers for search and seizure operations.
These powers are in addition to those granted to Sebi through earlier two ordinances, the last of which lapsed in January.
The new ordinance has come into effect from March 28 and has restored many other powers to more effectively crackdown on ponzi schemes and other manipulative activities.
The ordinance vests with the Sebi’s various powers, including carrying out search and seizure operations, and calling for information from bank, corporation, board or any other authority. It also allows the regulator to seek telephone call data records.
Sebi would have powers to increase the penalty on an erring entity within three months of passing an order provided the concerned person is given an opportunity to be heard.
In case, the board considers that the order passed by the adjudicating officer “is erroneous to the extent that it is not in the interests of the securities market, it may, after making or causing to be made such inquiry as it deems necessary, pass an order enhancing the quantum of penalty, if circumstances of the case so justify”.
Such an action could be initiated only within three months from the date of passing an order by the adjudicating officer or dismissal of the appeal, whichever is earlier, as per the ordinance, re-promulgated for the third time by President Pranab Mukherjee on March 28.
Hindustan Times, New Delhi, 01-04-2014