The Hindu : Lok Sabha passes SEBI Bill

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Thursday, Nov 28, 2002

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Lok Sabha passes SEBI Bill

NEW DELHI NOV. 27. The Lok Sabha today passed the Bill to amend the Securities and Exchange Board of India (SEBI) Act, 1992 which seeks to give more teeth to the market regulator, with Finance Minister, Jaswant Singh, stating that the Government would take steps in a phased manner to revive the capital market.

Replying to the debate on the Bill, Mr. Singh said the first step of the Government was to restore the confidence of the capital market, followed by its development, and finally take fiscal measures to promote investor sentiment. He listed several measures the Government had already taken in this regard, like demutalisation of stock exchanges, T plus one rolling settlement and screen based trading.

Mr. Singh assured the House that the Government would bring in amendments and improvements in the Bill on the basis of the recommendations of the Joint Parliamentary Committee (JPC) probing the securities scam.

Replying to the widespread criticism of the Opposition and some members from the ruling party that the Government should not have resorted to an Ordinance just two days ahead of the commencement of the winter session, Mr. Singh assured that unless it was absolutely essential the Government in future would not take recourse to an Ordinance. The members had stated that the Government should take utmost caution in bringing about an Ordinance, particularly in financial matters.

Mr. Singh said it was not the intention of the Government to bypass Parliament or `its child', the Standing Committee. The Ordinance had to be brought forward due to the exigencies of the situation. On this assurance, Basudeb Acharia, CPI(M), who had moved a statutory resolution against SEBI (Amendment) Ordinance promulgated by the President, withdrew his objections.

The Bill, which seeks to replace the Ordinance, aims to cover the shortcomings in the legal provisions of the SEBI Act 1992 particularly with respect to inspection, investigation and enforcement.

It increases the penalties to provide a significant deterrent to companies, which break rules.

Mr. Singh said the Government had asked SEBI to investigate the illegal stock exchanges in the country. He said the Kania Committee report on demutalisation of stock exchanges would be implemented soon. The Finance Minister said the Bill would help bring about a reduction in litigation. — UNI

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