Pitching for a major overhaul of the powers it has got to deal with market manipulators, SEBI says there is an urgent need to carry out these changes to ensure speedier probes and fast-track prosecution of the culprits.
The capital markets watchdog has asked the Government to empower it to carry out search and seizure operations, to attach properties and to ask for information and records for all relevant entities.
Besides, SEBI has also asked the Government to streamline the procedures involved in execution of its existing powers.
“At times it has been difficult for us in many cases to move forward in absence of these powers.
“Also, there are long procedures involved in executing many powers that we already have and we want those processes to be streamlined,” SEBI Chairman, U.K. Sinha, said.
“The expectation is that once we get these powers, then we would be able to move really fast on the investigations that we undertake, and on the actions we need to take against the culprits and in bringing to book all the manipulators and others defrauding the investors,” Sinha said.
Noting that the Securities and Exchange Board of India (SEBI) has come a long way since it was set up 25 years ago in 1988 as an independent regulator, its eighth Chairman said that the time has come for an overhaul of the regulations governing SEBI’s powers and other functions.
“Now we have found that there are certain lacunae in the regulations and there are certain areas where more clarity is required.
“There are some powers that we already have, but the procedures to execute those powers are very difficult,” Sinha told PTI in an interview.
“We don’t have the direct powers to recover the dues, the powers to attach properties etc. Many such powers are already there with some other regulators and the agencies such as the Competition Commission of India and the tax departments, among others,” the SEBI chief said.
“Another area where we face difficulties is while seeking information or records from various entities in the process of our investigations. What happens is that these entities tell us that they do not fall under SEBI jurisdiction and, therefore, they are not required to provide information to us.
“We face lots of difficulties in getting these details.
There is also the issue of call data records that we need to establish that two parties have been talking to each other and could be related entities.
“We also do not have search and seizure powers, which is there with some other agencies,” he added.
Experts say that the lack of these powers was felt in a big way during some of the recent cases, including the high profile Sahara case, where SEBI could pass attachment orders only after a Supreme Court directive.
Besides, hundreds of entities have managed to avoid paying penalties imposed by SEBI, as the regulator does not have any direct powers to recover these penalties.