Search the Internet          Tips  Sites: Finance, Investment

Finance ministry's Cabinet note on enhancing Sebi's powers ready

Subhomoy Bhattacharjee

The finance ministry has finalised the Cabinet note on enhancing the powers of Securities and Exchange Board of India.

The proposal seeking the amendment to the Securities Contracts Regulation Act is, however, not expected to be taken up by the Cabinet this week, putting paid to its chances of being passed by Parliament in the current session.

The ministry feels that the government may have to issue an ordinance after the current winter session since the legislative agenda for this session has already been drawn up.

The ministry is awaiting the Cabinet decision before deciding on the replacement for the outgoing chairman of the market regulator who is due to retire in February 2002, and also for J S Verma and Kumar Mangalam Birla who have already left Sebi.

Sources said the proposals regarding the replacements have been sent back to the ministry by the finance minister saying that the decision should await the Cabinet's approval of the changes in Sebi Act.

The amendments finalised by the ministry include raising the number of board members to nine from the current six.

However, the provisions have left the issue of how many of the members would be full time unspecified.

But since under the amended provisions the government will have the right to appoint five nominees to the board, instead of the current two, it is expected that all these will be ipsi facto part time members making the number of full time member four.

Besides the market regulator has also been given enhanced investigative powers under section 240 and 241 of the Companies Act to carry out inspection of companies and report on the same to the government also.

The amended provision has also enhanced the penalty for violation of to at least Rs 250 million or three times the monetary value of the offence committed, whichever is more.

Speaking to reporters last week economic affairs secretary C M Vasudev had said the cabinet approval for the amendment to the Sebi Act should be through in another two weeks.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report