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Parliament approves Sebi (Amendment) Bill

The Parliament on Monday approved a Bill to give more teeth to market regulator Securities and Exchange Board of India, including search and seizure power, with Finance Minister Jaswant Singh announcing that Serious Frauds Office would be set up soon to check white-collar crimes.

Sebi (Amendment) Bill to replace an ordinance in this regard was passed by a voice vote in Rajya Sabha after withdrawal of the statutory resolution.

The Bill was passed by Lok Sabha last week.

Winding up the discussion, Singh said the CBI alone could not deal with the complex white-collar crime and it was for this reason that a Serious Frauds Office would be set up in the shortest possible time.

"I hope to bring in a legislation on Serious Frauds Office in this session itself, failing which I will bring it in the next session", Singh said.

Stating there was a need for a highly specialised body to handle such frauds, Singh said this will meet current requirements.

"We will benefit with this process or in case it is moved to a standing committee, the members would be able to give their views and suggestions", he said.

Singh assured the members that he would promote demutualisation of trading to prevent abuse of market by brokers and traders.

The Bill, among other things, would increase the number of members from six to nine besides conferring power to Sebi to summon persons or institutions, suspending trading of any security at any exchange, prohibiting insider trading and manipulative and deceptive devices as also enhancing the penalties under the original Act.

Defending the decision to take recourse to an Ordinance, Singh said sometimes such things become inevitable due to the exigencies.

"I agree that ordinance is not a preferred route. However, we are compelled by circumstances due to economic considerations," he said.

Singh said so far 548 entities have been asked to refund the money to small investors, adding 132 entities have been debarred from participating in the capital market.

He said prosecution process has been launched against 92 vanishing companies besides taking up prosecution cases against 17 companies for insider trading.

On demands for a white paper on market regulations, the finance minister said the Joint Parliamentary Committee probing the stock scam is already engaged on the issue and the government would await its report before taking any decision.

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