New Delhi:The government will come out with an ordinance to provide more powers to capital market regulator Sebi to tackle fraudulent investment schemes that defraud investors.
The Union Cabinet yesterday had approved the proposal to amend the Sebi Act and other relevant regulations that would give greater powers to the regulator in its efforts to tackle all kinds of money-collection schemes, as also to effectively crackdown on defaulters in the stock markets.
Corporate Affairs Minister Sachin Pilot Thursday said Sebi is being given more powers to regulate fraudulent activities and ponzi schemes that collect money from the poor people by giving wrongful information.
"Sebi is being given the authority to do much more now and take effective and quick action against non complaint companies. The Cabinet has approved it and the Ministry of Corporate Affairs is fully supporting the efforts of Sebi," Pilot told reporters here.
When asked whether the government would come out with an ordinance for implementing the amendments, Pilot replied in the affirmative.
"The smallest of the investors need the most of our protection and I believe that the ponzi schemes, these chit funds that are operation illegally need to be put (under regulation). I think few of the amendments proposed are to be put as ordinance," he said.
However, specific details were not disclosed.
Besides, Sebi is expected to have powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being probed by it.
Speaking on the sidelines of an event organised by industry body Assocham, Pilot said the country should have a regulatory environment where compliance is necessary and people are not duped of their hard earned money.
"For companies that violate laws the regulator, government will make sure that a strong action is taken," he noted.
Emphasising that companies raising money illegally should be prohibited, the Union Minister said it is important for Sebi to have enforcing ability to make sure that these companies are put an end to.
In recent times, there have been many instances such as scam perpetrated by Kolkata-based Saradha group that allegedly defrauded money from the public.
First Published: Thursday, July 18, 2013, 15:18