Govt introduces Bill in Lok Sabha to amend Sebi laws

With the amendments, Sebi would have more powers to crack down on errant companies

Government today introduced a bill in the Lok Sabha to replace the ordinance which sought to provide more powers to capital market regulator Sebi.

The Securities Laws (Amendment) Bill, 2013, was introduced by Minister of State for Finance Namo Narain Meena.

The Bill is to amend the Securities and Exchange Board of India Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996.

In July, President Pranab Mukherjee had promulgated an ordinance amending the securities law that would provide more powers to the capital market watchdog Securities and Exchange Board of India (Sebi).

With the amendments, Sebi would have more powers to crack down on ponzi schemes, seek phone call records to check insider trading and carry out search and seizure operations.

Last month, the government had said promulgation of the ordinance demonstrated its firm commitment and resolve to act with speed and alacrity to curb irregularities and frauds in securities market.

As per the amended law, Sebi can regulate any money pooling scheme worth Rs 100 crore or more and attach assets in cases of non-compliance, it said, adding the Sebi Chairman would have the authority to order "search and seizure operations".

The market watchdog would also have powers to seek information, such as telephone call data records, from any person or entity in respect to any securities transaction being investigated by it.

The amendments would clear the air over regulatory gaps and overlaps with regard to types of instruments used in raising funds.