Securities Laws (Amendment) Act, 2014
Securities Laws (Amendment) Bill, 2014 | |
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Parliament of India | |
Long title
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Citation | Act No. 27 of 2014 |
Territorial extent | Whole of India |
Enacted by | Parliament of India |
Assented to | 22 August 2014 |
Commenced | 25 August 2014 |
Status: In force |
Securities Laws (Amendment) Act, 2014 is a legislation in
History
After the Saradha Group financial scandal, the Government of India formed an inter-ministerial group to find ways to close off loopholes the regulations which allowed such pyramid schemes to operate.[3] The Securities Law (Amendment) Ordinance was promulgated on 17 July 2013, then for a second time in September 2013. It lapsed on 15 January 2014.[4][5] The bill couldn't be presented in the winter session of Parliament as the standing committee on finance had not finalized the report. It promulgated for a third time on 28 March 2014.[5]
On 24 July 2014,
Summary
The ordinance passed in March 2014 had 30 clauses, whereas the bill contained 57 clauses. The bill amended three pre-existing market related laws. It retained the powers given to SEBI in the ordinance, but also introduced safeguards against misuse.[7]
The new law gave SEBI the power to search and obtain information, including call records,
Depending on the nature of the crime, minimum penalties may range from ₹1 lakh to ₹10 lakh. The minimum penalty for securities related crimes was set at ₹1 lakh. The minimum penalty for insider trading was at ₹10 lakh. The maximum penalty for insider trading was set at ₹25 crore or three times the profit, whichever was higher. SEBI was given the authority to initiate recovery and sale of assets. SEBI has also been given the power to enhance a penalty or settle an ongoing legal proceeding. Guidelines for special courts were also included in the bill.[7]
See also
- Saradha Group financial scandal
- Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
References
- ^ a b c "Ponzi menace: Lok Sabha clears bill, Sebi gets more teeth". Hindustan Times. 7 August 2014. Archived from the original on 7 August 2014. Retrieved 8 August 2014.
- ^ a b c "Bill to empower Sebi introduced in LS". The Statesman. Press Trust of India. 4 August 2014. Retrieved 8 August 2014.
- Live Mint. 18 July 2013. Retrieved 9 August 2014.
- ^ "Cabinet likely to consider proposal for Sebi ordinance today". The Indian Express. 28 February 2014. Retrieved 8 August 2014.
- ^ a b "Power to Sebi: Ordinance promulgated for third time". The Indian Express. 28 March 2014. Retrieved 8 August 2014.
- ^ "Cabinet clears bill to empower Sebi to deal with ponzi schemes". The Indian Express. 24 July 2014. Retrieved 8 August 2014.
- ^ a b c "New Sebi bill tweaks provisions for penalties, seizures". The Economic Times. 4 August 2014. Retrieved 9 August 2014.
- ^ "Lok Sabha passes Bill to give teeth to Sebi to tackle ponzi menace". The Economic Times. 6 August 2014. Retrieved 8 August 2014.