Capital markets regulator Securities and Exchange Board of India (SEBI) is being armed with significantly more investigative powers to go after market manipulators, including the right to conduct searches and seize assets and documents.
The Cabinet on Wednesday approved issue of an ordinance to this effect, a senior Cabinet Minister confirmed. The Government has also, via an executive order, empowered the market watchdog to seek call data records from telecom companies of those suspected of wrongdoing.
The ordinance is also likely to allow SEBI to regulate various schemes that could be in the nature of collective investment schemes, but do not strictly fall within the definition of collective investment schemes as provided in the SEBI Act. The recent Saradha Group scam was one such scheme that fell in a grey area and escaped regulation.
All such schemes, collecting more than Rs 100 crore from the public, are now expected to come under SEBI’s ambit. The government’s move follows a request from SEBI to the Finance Ministry seeking additional powers.
Reuters reports : The regulator first sought the authority to log phone calls almost two years ago in response to growing instances of manipulation on the country's stock markets and to check the flow of untaxed money into the country. The Cabinet also approved amending the securities law to give SEBI a mandate to regulate ‘chit funds’, which draw their funding from individual savers, many without regular bank accounts.
shishir.sinha@thehindu.co.in