New Delhi, Nov. 25: The Bill to arm market regulator Securities and Exchange Board of India (Sebi) with wide-ranging stock market policing and penal powers was introduced today in the Lok Sabha.
The Securities and Exchange Board of India (Amendment) Bill, 2002, seeks increasing the number of members of the Sebi to nine from six. The Bill was moved by minister of state for finance Anand Rao Adsul.
It confers power upon the board for calling for information and record from any bank or other authority or board or corporation established or constituted by or under any central, state or provincial act in respect of any transaction in securities which are under investigation or enquiry by the board.
Sebi Act, 1992 was enacted to protect the interest of investors in securities and to promote the development of and to regulate the market. The government had brought an Ordinance on October 29, 2002 to amend the Act.
The Bill vests powers with the board for passing an order for reasons to be recorded in writing, in the interest of investors or securities market, either pending investigation or enquiry or on completion of such investigation or enquiry for taking measures like suspending the trading of any security.
Sebi can also restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities, the Bill said.
The new legislations in the Sebi Act will empower the regulator to levy penalities on rogue traders that could go up to as much as three times the defalcation amount.
It will also allow the formation of a three-member Securities Appelate Tribunal which will empower SAT and courts to compound offences.
According to the Bill, many shortcomings in the legal provisions of the Sebi Act, 1992 have been noticed, particularly with respect to inspection, investigation and enforcement.