Armed with new powers to act against fraudsters and market manipulators, Sebi Chairman U K Sinha has said the regulator has already begun utilising them in a big way and a process has been initiated to set up a special court to hear Sebi-related matters for faster prosecution.
New powers have made it easier for the Securities and Exchange Board of India (Sebi) to prosecute culprits, recover money from fraudsters and erring companies, as also facilitate a faster refund of investors’ hard-earned money, Sinha said, while adding that sufficient safeguards have been incorporated to check any abuse or misuse of these powers.
“My worry is that the Ordinance through which we have got these powers should be soon converted into an Act of Parliament, as we have already begun utilising them and have taken actions based on these powers,” Sinha said.
Amid a large number of cases where investors were being defrauded of their hard-earned money by fraudulent schemes, Sebi was earlier this year granted greater powers through an Ordinance, which has been already promulgated twice by the government.
The Ordinance needs to be replaced by an Act, for which the Securities Laws Amendment Bill is pending before Parliament.
The Parliamentary Standing Committee needs to give its report on the Bill before it can be taken up for its passage.
Finance Minister P Chidambaram on Saturday had said the government would have to take the unprecedented move of promulgating the Ordinance for the third time if the panel did not submit its report and the Bill was not passed before the end of current Parliament session.
“Many of the actions we have already taken (based on these powers), we would be at a very major disadvantage and what will we do if it does not become an Act,” Sinha said.
He also said sufficient safeguards have been put in place against any misuse of the new powers and all the genuine "questions and worries" about any abuse of these powers have been addressed.