FM writes to LS speaker on Sebi Bill

Keen on getting Parliament's nod for the Bill empowering Sebi to deal with ponzi schemes, Finance Minister P Chidambaram has requested Lok Sabha Speaker Meira Kumar to obtain standing committee's report in time to ensure that the legislation is passed in the upcoming session.

 

The US communication comes against the backdrop of capital market regulator Sebi losing its newly acquired powers to clamp down on ponzi schemes as the ordinance in this regard lapsed last week.

 

According to a senior Finance Ministry official, Chidambaram has written to Meira Kumar in this regard.

 

The government wants to ensure passage of the Bill in the ensuing session of Parliament scheduled between February 5-21, the official said.

 

The Securities Laws (Amendment) Bill, 2013, empowers Sebi to regulate any money pooling scheme worth Rs 100 crore or more, attach assets in cases of non-compliance and to order search and seizure operations.

 

Since the government could not pass the legislation in the previous sessions, it had come out with an ordinance giving temporary powers to Sebi to bolster its crackdown on fraudulent investment schemes.

 

The ordinance, which was promulgated twice, lapsed on January 17.

 

President Pranab Mukherjee promulgated the ordinance amending the Securities Laws first on July 18, 2013, and again on September 16.

 

The ordinance to grant additional powers to Sebi -- freezing of bank accounts, attachment of properties, conduct of search and seizure operations and launch of recovery proceedings -- was first promulgated in July and for the second time in September last year.

 

Using these powers, Sebi began passing attachment orders and launching recovery proceedings in October 2013. Since then, it has initiated at least 311 attachment proceedings in nearly 65 cases for recovery of investor money amassed through illicit schemes, as also of long-pending penalties for various market related defaults.

 

The Securities and Exchange Board of India (Sebi) had been seeking these powers for long to better regulate markets and take to task the fraudsters and other defaulters more effectively.

 

Soon after the promulgation of the ordinance, Sebi began exercising these powers and also putting in place necessary operational mechanism, including those requiring changes for manpower deployment.