Sebi readies action plan to use new powers

Market regulator framing new rules, issuing internal guidance

The Securities and Exchange Board of India (Sebi) has readied an action plan to start exercising its new powers.

On July 18, the president had promulgated an ordinance granting the securities regulator more teeth to effectively act against violators by conducting search and seizure operations and recover dues from them by attachment and sale of assets. The regulator is in the process of framing new regulations and issuing new internal guidelines to exercise these new powers, a Sebi board meeting agenda paper reveals.

Sebi plans to tie up with both domestic and foreign regulators with functions or powers similar to the ones it has.

It would take prior approval from the government before entering into any agreement with a foreign regulator, it has said.

It plans to request the government to establish or designate special courts for speedy trials of offences under securities laws. It is in the process of framing regulations to use disgorged amounts; it plans to credit such amounts recovered from violators into the Investor Education and Protection Fund. It would amend the Sebi (Investor Protection and Education Fund) Regulations, 2009.

To “bring any scheme or arrangement involving pooling of money in the ambit of CIS (collective investment schemes) in the interest of investors and securities market”, it would also amend the Sebi (Collective Investment Schemes) Regulations, 1999, it said in the agenda paper.

Sebi would also frame regulations pertaining to search and seizure operations, including the procedure to be followed by authorised officers in such cases. It is also preparing internal guidelines for officers to be appointed for recovery of amounts through attachment and sale of assets.

The regulator also plans to deploy adequate staff with legal backgrounds to conduct search and seizure operations, attachment and sale of assets. For these functions, it plans to train its personnel and provide them relevant infrastructure.