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President of India promulgated the Securities Laws (Amendment) Ordinance 2013

Jul 21, 2013 12:38 IST

Pranab Mukherjee, the President of India on 18 July 2013 promulgated the Securities Law Amendment Ordinance 2013. The ordinance would grant Securities and Exchange Board of India (SEBI), the powers to regulate any pooling of funds under an investment contract involving a corpus of 100 crore rupees or more and attach assets in case of non-compliance. The ordinance was promulgated by the President following the powers granted to him by Clause 1 of Article 123 of Constitution

The Chairman of SEBI would have powers to authorize the carrying out of search and seizure operations, as part of its efforts to crack down on ponzi schemes.

With President's approval of the Ordinance, SEBI has received the power to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it. Establishment of Special Courts enabled by this Ordinance would fast-track the resolution of pending SEBI related cases.

Article 123 of Constitution of India: Power of President to promulgate Ordinances during recess of Parliament.-

(1) If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require.

(2) An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance-

(a) shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and

(b) may be withdrawn at any time by the President. Explanation.- Where the Houses of Parliament are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause.

(3) If and so far as an Ordinance under this article makes any provision, which Parliament would not under this Constitution be competent to enact, it shall be void.

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