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The department of expenditure, the nodal body that oversees public finances, has sought cost-related details for the setting up of special courts under the new Sebi Bill from the department of economic affairs (DEA). The amended Sebi Bill, cleared by the Cabinet last week, mandates setting up of special courts for fast-track resolutions of securities law-related offences.
According to sources, the expenditure department has given in-principle approval for establishing special courts. However, it has asked the DEA to outline details such as the number of courts it plans to set up and the cost involved.
The Cabinet had approached the department of expenditure to help meet the additional costs incurred while setting up these courts.
"Before finalising the fund flow to meet the expenses for the special courts, the department has asked that the DEA should come back with the expected financial liability and how much would it deplete the coffers of the state and central governments," said an official.
In 2012, Sebi had proposed to the government to set up special courts to expedite cases.
According to the Sebi Act 1992, the regulator has powers to prosecute and impose monetary penalties in fraud cases. Historically, the prosecution has not met with adequate success. In some cases, where Sebi tried to prosecute, the process went on for years.
Even as the Cabinet has cleared the Sebi Bill, there is much clarity awaited on how these courts will function. Experts say there may not be a separate bench but civil courts with designated presiding officers to fast-track fraud cases.
NPS will no longer be CIS
The Sebi Bill cleared by the Cabinet has kept the National Pension System (NPS) outside the ambit of the Collective Investment Schemes (CIS). Under the Sebi ordinance, any scheme that pooled money of more than Rs 100 crore, barring schemes under the Employee Provident Fund (EPF), was a CIS. Experts say this created an issue as NPS was not under the EPF Act. However, the recently approved Sebi Bill has addressed the anomaly by excluding NPS from the definition of CIS.
