It is understood that the government is planning to amend the Securities and Exchange Board of India (SEBI) Act so as to enable SEBI to introduce plea bargain, disgorgement, etc. in the forthcoming budget session. The Ministry of Finance has called a meeting of the SEBI officials to discuss and finalize these amendments before placing it for the amendment. The Act will also incorporate the clause of compounding of cases in the capital market. This power will be accorded to the court and not to the SEBI. Plea bargaining might be allowed for select category of cases and not all. The SEBI Act amendments will also address more clarity and transparency by introducing clauses specifically related to disgorgement. The amendments will also incorporate the creation of an investor protection fund and the provision that all fees and charges collected by the regulator will be transferred to the government account. Among other things, this will include fees collected from brokers, penalties imposed, etc. After the funds were transferred to the government account, the SEBI might have to take the permission of the government to withdraw funds for use.
Read the Business Standard article.
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