SEBI empowering ‘Securities Laws (Amendment) Bill 2014’ passed in Lok Sabha

August 6, 2014

Securities Laws (Amendment) Bill 2014 passed in the Lok Sabha. By the virtue of the bill, Securities Exchange Board of India (SEBI) will be empowered and strengthened to clamp down on fraudulent investment schemes and to seek information from any entity related to an investigation.
Key points in Securities Laws (Amendment) Bill 2014

SEBI will have the authority to seek relevant information and records from any person
Any pooling of funds in any unregistered scheme or arrangement, having corpus of Rs 100 crore or more, shall be deemed to be a collective investment scheme
It provides for express powers for the settlement (compounding)
Authorizes SEBI to set up Special Courts – to expedite trial with powers such as the authority to seek call-data records
It provides SEBI powers of recovery of amounts
It empowers the institution to increase the penalty imposed by an adjudicating officer
SEBI will have the authority to conduct search-and-seizure operations related to probes under a designated court in Mumbai.
Section 15A-HB of the SEBI Act has been amended and prescribed a minimum penalty to be slapped for each violation.

The law in its current form authorizes SEBI to carry out the search operations only after being permitted by the magistrate of the area, which compromises with the secrecy of the move. Previously, the Section 15A-HB prescribed one level of penalties to be imposed for various offences but without any minimum level of penalty or range and without giving any discretion to the Adjudicating Officers.

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