Prez has re-promulgated Sebi Ordinance: FinMin

Says it strengthens Sebi's powers while brining in checks & balances

The finance ministry today confirmed President Pranab Mukherjee has re-promulgated the Securities Laws (Amendment) Ordinance, 2014, that seeks to empower the Securities & Exchange Board of India (Sebi) to effectively check illegal deposit taking and ponzi schemes.

“The promulgation of this Ordinance would not only ensure the continuance of the actions already initiated by the Securities and Exchange Board of India but would also strengthen the enforcement powers of Sebi while bringing in inbuilt checks and balances to its powers,” the finance ministry said.

The promulgation happened under clause (1) of the Article 123 of the Constitution on March 28 after the Union Cabinet gave its nod for the same a day earlier.

The Ordinance, besides keeping in force the amendments that gave the legal backing to Sebi to tackle critical issues including powers to respond to the growing menace of illegal deposit taking and Ponzi schemes, has also introduced some additional amendments based on the recommendations of Standing Committee of Finance and additional proposals received from Sebi.

The additional amendments provide that the Chairman of Sebi shall record the reasons in writing while issuing an order for search and seizure, and that the authorised officer may requisition the services of a police officer or any officer of the Central government to assist him in search and seizure. It also empowers the Sebi Board to recall and enhance the penalty imposed by the adjudicating officer.

The Securities Laws (Amendment) Ordinance 2013 was promulgated on July 18, 2013. The Securities Laws (Amendment) Bill 2013 was introduced in the Lok Sabha on August 12, 2013 during the Monsoon session to replace the Ordinance.

Since the Monsoon session of Parliament concluded without the consideration and passing of the Bill, the second Ordinance was promulgated on September 16. It got lapsed on January 16, 2014 after the expiry of six weeks from December 5, 2013, the date of commencement of the Winter Session.

Since Sebi lost the powers, the cases where action had been taken the validity could not be challenged, but in other cases where a final decision was still pending, Sebi could not move forward. That’s why it has been re-promulgated again.