Millennium Post

Prez re-promulgates Sebi ordinance against Ponzis

President Pranab Mukherjee has re-promulgated the ordinance that provides more powers to market regulator Sebi, especially, to crack down on illicit money pooling schemes. The ordinance, which lapsed on January 15, has been re- promulgated for the third time as Parliament could not pass the Securities Laws (Amendment) Bill 2013 in the Winter session.

‘Yes’ said a top government official when asked if the President has re-promulgated the Sebi
ordinance. Among others, the ordinance provides powers for Securities and Exchange Board of India (Sebi) Chairman to authorise search and seizure.

For re-promulgating the ordinance for the third time, the Finance Ministry had sought the opinion of the Law Ministry and later it was cleared by the Cabinet.

The ordinance was earlier promulgated by President Pranab Mukherjee on July 18, 2013 after the Cabinet gave its approval to amend the Sebi Act, 1992 to give Sebi additional powers and was re-promulgated on September 16.

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 and its Chairman can order ‘search and seizure operations’.

It also empowers the market watchdog to seek information, such as telephone call data records, from any persons or entities 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.
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