The proposed changes in securities market laws will further strengthen SEBI to deal with ponzi schemes while providing safeguards to ensure the powers are not misused, Finance Minister Arun Jaitley said today.
Initiating a discussion on Securities Laws (Amendment) Bill, 2014, Jaitley said changes in securities market as well as in the nature of "aberrations" have necessitated the need for changing the rules.
Under the new bill, the Securities and Exchange Board of India (SEBI) would require permission from a designated court in Mumbai for carrying out search and seizure operations related to investigations.
"Secrecy is the essence of any surprise element during a search... I have worked out that instead of having to go to entire country for a permission, a particular court is being created in Mumbai where the headquarter of SEBI is.
"If they want to search any premises, they will go to that designated court, place documents and take permission of court before they can conduct the search," Jaitley said.
The original Act has a provision that SEBI could conduct search operations after seeking permission of the Magistrate of the area. Former Finance Minister P Chidambaram had then changed the provision allowing SEBI to conduct search operation without any permission in the ordinance.
"After his (Magistrate) permission they would conduct the search as a result of which the whole issue will become public and the purpose of the search itself would be defeated," Jaitley said.
The bill, introduced in the Lok Sabha yesterday, aims to empower capital market watchdog (SEBI) giving powers such as to crackdown on fraudulent investment schemes, seek information from any entity related to a probe authority and to seek call data records.
