Armed with new powers to clamp down on illegal money-pooling schemes and other defaults, Sebi today said offenders can no longer ignore its orders and drag on the cases for years as the new law would fast-track action against them and ensure refund of money to investors.

These additional powers, as also setting-up of a special Sebi court, would ensure that fraudsters do not go scot-free and the regulator is be able to initiate recovery proceedings against them and even conduct search and seizure operations at defaulters' premises, Sebi chief U K Sinha said.

There should be a sea-change from the earlier occasions when offenders would tend to "ignore orders from Sebi" and the legal cases would drag on for years without recovery of any money, Sinha told PTI in an interview.

"The cases have gone for 10-15 years and there no money has been recovered. So except for a little bit of 'naming and shaming' for individual or a company, it did not have much impact on them," he said.

After clearance from Parliament earlier this month, the government has notified the Securities Laws Amendments Act, which empowers capital markets watchdog Sebi to take action against all unregulated money-pooling schemes involving Rs 100 crore or more.

The new Act gives Sebi authority to pass orders for attachment of properties, arrest and detaining of defaulters in prison and for disgorgement of ill-gotten money.

It also gives Sebi access to call data records, or any other information from any entity during investigations, while it can now conduct search and seizure operations after permission from a special Sebi Court to be set up soon.

"The new Act clearly defines what can be a Collective Investment Scheme and therefore falls under Sebi jurisdiction. This would make it very difficult for operators of such schemes to circumvent the regulations," Sinha said.

The recovery and disgorgement powers would help in facilitating refund of money to investors, he added.

Sinha said the special court should be set up soon as a process in this regard has already been initiated and the regulator has taken up the matter with the government and the Mumbai High Court.

The new powers have been given against the backdrop of a large number of illicit money-pooling schemes, involving funds worth thousands of crores, coming to fore in past couple of years, including Saradha and other scams in West Bengal.

Sebi was given temporary powers in July 2013 through an ordinance, which was promulgated thrice before lapsing last month.

"Sebi is a creature of Parliament. Like many other parts of the world, in India also, regulatory action has originated after a crisis. Unfortunately, this has been a trend not only in India but almost all parts of the world," Sinha said.

He gave example of the Dodd-Frank Act of the USA, which was put in place after economic crisis of 2008, as also of the Great Depression resulting into new banking laws in 1930s.

"What I am saying is that it is such a dynamic area and there are so many 'unknown unknowns' that the entire political system and the regulatory system often have a lag and we become wiser after an event," said Sinha, who became Sebi Chairman in February 2011. He got a two-year extension in February 2014 after the expiry of his initial three-year term.

Sinha said the last major amendments to the Sebi Act took place in 2002 after the Ketan Parekh IPO scam.

He said: "Right now the area of focus which we have in Sebi is particularly with regard to investor-protection and with regard to the development and the regulation of the market.

"These are the three mandates given to us by the Act. On matters of investment protection, the best way to describe would be to through the latest amendment that happened in the Sebi Act."