Markets regulator Sebi has notified new norms that will dilute its chairman's powers on conduct of search and seizure of defaulters' properties, with permission for such operations being required from a special court.
Under the new norms, Sebi will have to seek permission from special courts to conduct search and seizure operations, as against earlier regulations that had provided the capital markets regulator chief to directly authorise such actions.
These regulations would be called the Securities and Exchange Board of India (Procedure for Search and Seizure) Repeal Regulations, 2015.
The move comes following demands that the greater powers need to be balanced with necessary safeguards.
Sebi Chairman was earlier authorised to conduct search and seizure operations against suspected entities, but the new notification provides that permission for such actions would need to be obtained from a Magistrate or Judge of a designated court.
Earlier in August last year, the government had notified a new law empowering the capital market regulator to pass orders for attachment of properties, arrest of defaulters and to access call data records.
The Securities Laws Amendment Act which had come into force through a gazette notification dated August 2014, is part of the government and regulator's efforts to tighten the noose around fraudsters in the wake of several cases of illicit money-pooling activities including ponzi operators in various parts of the country.
