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July 19, 2001
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Money > Business Headlines > Report July 19, 2001 |
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Sebi Act may be referred to JPCP Vaidyanathan Iyer & Subhomoy Bhattacharjee The move to provide additional powers to the Securities and Exchange Board of India will take some more time as the government is planning to refer the amendment to the Sebi Act to the joint parliamentary committee probing the stock scam. The JPC is already debating the role played by the market regulator in the recent stock scam and has also heard Sebi's deposition on increasing its powers. Sources close to the committee said though finance bills are normally referred to the standing committee on finance for a clause-by-clause study, in the case of the Securities Laws Amendment Bill 2001, a JPC clearance will be involved. The process may also delay clearance of the bill by Parliament. As it is, committee members have often stressed that it is not the absence of powers with Sebi but a slackness in implementation that had contributed to the recurrence of stock scams. The department of company affairs and the Reserve Bank of India also apparently feel the same. According to JPC sources, it was well within the purview of Sebi to evolve a common operations model for all the stock exchanges, which it failed to do. Apart from this, the JPC's findings reveal that there have been lapses in information flow between the stock exchanges and Sebi. "The executive director in a stock exchange, who is a Sebi appointee can always alert the regulator on any unusual movement in the prices. Our observations, however, reveal that the information did not reach Sebi in several instances," said a JPC member. The changes envisaged in the Sebi Act include increasing the number of full-time members in the board to four, excluding the chairman and raising the penalty on companies to three times the money lost by depositors in the capital markets due to their actions. The committee is of the view that manning the stock exchanges effectively requires that the whistle be blown at the right moment. Referring to the far-reaching powers, which Sebi has sought, the JPC members said it is not that the regulator does not have adequate powers. A Cabinet note is expected soon, after which the bill will be tabled in Parliament. Sources said given the earlier acrimony that Sebi had generated in the standing committee about its powers, and the fact that the committee is still debating the fiscal responsibility bill, its quick clearance through Parliament seems remote. Powered by YOU MAY ALSO WANT TO READ:
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