The Finance Ministry today said that the re-promulgation of SEBI Ordinance would strengthen the regulator’s enforcement powers and also bring in-built checks and balances to its functioning.
President Pranab Mukherjee had on March 28 cleared the re-promulgation of SEBI Ordinance which provides powers to SEBI Chairman to authorise the investigating authority or any other officer of the regulator to conduct search and seizure under the SEBI Act and crack down on Ponzi schemes.
“The promulgation of this ordinance would not only ensure the continuance of actions already initiated by the Securities and Exchange Board of India, but would also strengthen the enforcement powers of SEBI while bringing in in-built checks and balances to its powers,” a Finance Ministry statement said.
The Cabinet, at its meeting on March 27, had approved the re-promulgation of the said ordinance.
“The Securities Laws (Amendment) Ordinance, 2014, besides keeping in force the amendments that gave the legal backing to SEBI to tackle critical issues, including powers to respond to the growing menace of illegal deposit taking and Ponzi schemes, has also introduced some additional amendments based on the recommendations of the Standing Committee of Finance and additional proposals received from SEBI,” the statement said.
The additional amendments are to provide that the SEBI chief shall record reasons in writing while issuing an order for search and seizure, it added.
The new amendments would also provide that the authorised officer may requisition the services of a police officer or any officer of the Central Government to assist him in search and seizure, the statement added.
They would also empower the SEBI board to recall and enhance the penalty imposed by the adjudicating officer, the Finance Ministry said.
The Securities Laws (Amendment) Ordinance 2013 was earlier promulgated on July 18, 2013.
The ordinance amending the securities laws was promulgated by President on July 18, 2013 after the Cabinet gave its approval to amend the SEBI Act, 1992 to give additional powers to SEBI. It was re-promulgated on September 16.