Cabinet to consider proposal for Sebi ordinance tomorrow

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The Cabinet is likely to consider tomorrow a proposal to bring an ordinance that provides more powers to market regulator Sebi for cracking down on ponzi schemes.

The Securities Law (Amendment) Ordinance will be re-promulgated as it had lapsed on January 15.

According to sources, the Cabinet may tomorrow consider a proposal to bring the ordinance.

The Securities and Exchange Board of India (Sebi) was given these powers last year through an ordinance, which was first promulgated in July and for second time in September, but it lapsed last month as a Bill in this regard could not be passed in Parliament.

The actions taken by Sebi till January 15 would remain valid and the recovery proceedings would continue in these cases.

The powers were given to check illicit investment schemes and other market manipulations.

A Bill to replace the ordinance could not be passed during the last Parliament session.

Among others, the ordinance had given Sebi greater powers to crack down on ponzi schemes, seek call data records to check insider trading and carry out search and seizure operations.

Under its recovery mechanism, Sebi was authorised to order attachment and sale of defaulter's movable property and immovable properties, freezing of bank accounts, arrest of the defaulter and his detention in prison, as also appointment of a receiver for management of movable and immovable properties.

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