Fw: Securities Laws Amendment Bill

Ministry of Finance18-July, 2013 21:19 IST
An Ordinance to Amend the Securities Laws Promulgated; SEBI would have now Powers to Regulate any Pooling of Funds Under An Investment Contract
Involving A Corpus Of Rs.100 Crore Or More, Attach Assets In Case Of
Non-Compliance And Chairman SEBI would have Powers to Authorize The
Carrying out of Search and Seizure Operations, As Part of Efforts to
Crack Down on Ponzi Schemes


The President was pleased to promulgate an Ordinance to amend the
Securities Laws today. This was consequent to the approval of the
Cabinet, which met on July 17, 2013, to 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.

Owing to new and innovative methods of raising funds from investors,
such as art funds, time-share funds, emu /goat farming schemes, there
has been regulatory gap /overlap regarding types of instruments / fund
raising. At the same time, SEBI receives complaints against unapproved
fund raising activities of certain companies that claim that they do not
come under the purview of SEBI Collective Investment Scheme
regulations. With the amendments in force now, SEBI would have powers to
regulate any pooling of funds under an investment contract involving a
corpus of Rs.100 Crore or more, attach assets in case of non-compliance
and Chairman SEBI would have powers to authorize the carrying out of
search and seizure operations, as part of efforts to crack down on ponzi
schemes.

Besides, SEBI would have 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. Establishment of
Special Courts enabled by this Ordinance would fast-track the resolution
of pending SEBI related cases.

These amendments to the SEBI Act, SCR Act and the Depositories Act were
finalized after detailed consultations with SEBI and other Ministries
and Departments including MHA, DoT, MCA, DFS etc. 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 promulgation of the Ordinance demonstrates the
firm commitment and resolve of the Government to act with speed and
alacrity to curb irregularities and frauds in securities market.