New Delhi : In a bid to bolster its evidence-gathering mechanism, market regulator Sebi is considering seeking powers from the government to intercept calls and electronic communications of those suspected of serious economic offences like insider trading.
Acting on recommendations made by a high-powered committee on fair market conduct, the capital markets regulator has prepared a proposal for its board to seek these powers by making necessary amendments in the concerned laws and regulations, a senior official said.
The committee, headed by former law secretary and Lok Sabha’s ex-secretary general T K Viswanathan, had suggested last month that Sebi may seek direct power to intercept calls and electronic communication by ensuring proper checks and balances, like some other regulatory agencies.
After putting up the suggestion for a public consultation process, Sebi (Securities and Exchange Board of India) has listed recommendations for its board meeting scheduled next week to approach the government for these powers, which the regulator wants to exercise while following necessary protocols for maintaining right to privacy.
During the consultation process, it was pointed out by some entities that call interception is a direct encroachment of a person’s liberty, which is guaranteed in the Indian constitution and therefore Sebi needs to take specific order from the government for it.
Another feedback was about Sebi approaching judicial authorities on case-to-case basis, while some asserted the proposed powers should be seen vis-a-vis privacy laws and not be misused.
The panel had made the recommendation considering the difficulty faced in investigating serious cases, particularly relating to insider trading and front running — which refer to benefitting through trading with prior access to price-sensitive information about listed companies.
100 brokerages under scanner
NEW DELHI: More than 100 brokerage firms, including several big names, have come under capital market regulator Sebi’s scanner for allegedly defrauding investors of over Rs 4,000 crore in the high-profile NSEL case, officials said on Wednesday. While proceedings are already underway against five brokers (Anand Rathi Commodities, Geofin Comtrade, Motilal Oswal Commodities Broker, Phillip Commodities India and India Infoline Commodities), Sebi has identified 111 other brokerage firms under its jurisdiction for further possible action for allegedly defaulting on payments on the erstwhile National Spot Exchange (NSEL) platform.
Out of these, Sebi will first initiate inspection of the ten biggest players by appointing an auditor, while action against the remaining 101 entities registered as stock brokers with Sebi would be taken after receipt of digital forensic audit from the Mumbai Police’s Economic Offence Wing (EOW), which has been probing the NSEL case.
Sebi will apprise its board next week of the status on the NSEL matter and also seek approval for its proposed action against stock brokers.
Overall, a total of 147 brokers have allegedly defaulted on payments to the tune of Rs 5,403 crore on the NSEL. Of these, 116 have applied or registered with Sebi as stock brokers and the remaining 31 members of the NSEL have not applied with markets regulator for registration.
