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Union Government proposed Stronger Powers to SEBI for tackling Ponzi Schemes

May 20, 2013 18:14 IST

The Union Government in Month of May 2013 has proposed Stronger Powers to (Securities and Exchange Board of India) SEBI enabling it to carry out search and seizure operations and for attachment of assets.
With this a Special power has also been proposed to SEBI with which it can seek information on telephone call data records, from any persons or entities in respect to any securities transaction being examined by it.

It is worth mentioning here that Proposals to make required amendments in the SEBI Act and other relevant regulations have been finalised after detailed consultations with the market regulator and are being presented before the Union Cabinet for its approval.

A Cabinet note in this regard has also been circulated by the Department of Economic Affairs to other departments in the Finance Ministry, as also to the Corporate Affairs, Home, Law and Telecom ministries, Reserve Bank of India, Planning Commission and Prime Minister’s Office for their comments and feedback on the proposals.

The Government is planning to introduce the Securities Laws (Amendment) Bill, 2013 in Parliament to carry out the proposed changes for grant of stronger powers to SEBI.

The Government has come up with the decision of accepting most of the proposals made by SEBI in this regard and the amendments would be carried out after the Cabinet approves them and the required amendment Bill is passed by Parliament.

What is Ponzi Schemes?

A Ponzi scheme is basically a fraudulent investment operation that pays returns to its investors from their own money or the money paid by following investors, rather than from profit earned by the individual or organization running the operation.
The Ponzi scheme generally tempts new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.

Is this article important for exams ? Yes70 People Agreed
Read more Current Affairs on: Union Government , SEBI , Ponzi Schemes

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