Lok Sabha passes Securities Laws Bill
Finance Minister Arun Jaitley
The Securities and Exchange Board of
India (SEBI) will now have explicit powers to disgorge — recover — the
illegal gains made through fraudulent deposit schemes and capital market offences. The assets recovered will be paid back by the market regulator to people who had lost their money in such schemes.
The
Securities Laws (amendment) Bill, 2014, which was approved unanimously
by the Lok Sabha on Wednesday, allows SEBI to issue disgorgement orders.
SEBI,
in its little over two decades of existence, has issued disgorgement
orders only on two occasions; once, in 2006, during the IPO
irregularities issue, and for the second time in the Satyam Computer
scandal.
The money collected will now be parked in SEBI’s Investor Protection and Education Fund.
This
fund should not be confused with the Investor Education and Protection
Fund that has been set up under the company law, Finance Minister Arun
Jaitley clarified during a parliamentary discussion on the Bill.
“They
are two separate funds. The IEPF under SEBI will have disgorged monies
from the regulator’s directions. The other investor protection fund
maintained under the company law is mainly unclaimed dividends,” Jaitley
said.
Currently, the Fund under the company law has a corpus of about Rs. 830 crore.
Over
the last one year — since the promulgation of an ordinance to initiate
action against illegal deposit-taking schemes — the IEPF under SEBI has
garnered a corpus of Rs. 30 crore.
“This
move to explicitly empower SEBI to issue disgorgement orders is a big
thing and augurs well for investor protection. So far, SEBI saw it only
as an implicit power. Now that it will be explicit, SEBI will, in all
its actions, first look at the possibility of disgorgement from the
offenders,” MS Sahoo, Secretary, Institute of Company Secretaries of
India, told
BusinessLine
.
Financial inclusion
Jaitley
also said that Prime Minister Narendra Modi will, in the next few days,
announce a financial inclusion project that would seek to open two bank
accounts in each of the 7.5 crore families identified for the exercise.
Once a financial inclusion project of this dimension is launched, the attraction of Ponzi schemes will come down, he added.
Based on businessline
GA Team
mahendra educational pvt ltd
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