The Supreme Court last week stated that the Securities and Exchange Board of India (Sebi) Act and its regulations referring to imposition of penalty for manipulative or fraudulent practices are “ somewhat unclear if not a confused picture that emanates from parallel provisions.” The procedural regulations including those that prescribe the procedural course, namely, Sebi ( Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations 2002 and the successor Regulation i. e. Sebi ( Intermediaries) Regulations 2008 contain identical and parallel provisions with regard to imposition of penalty resulting in myriad provisions dealing with the same situation. A comprehensive legislation can bring about more clarity and certainty on the norms governing the security/ capital market and, therefore, would best serve the interest of strengthening and securing the capital market. The court continued in its judgment, Sebi vs Kishore Ajmera, that “ a comprehensive legislation can bring about more clarity and certainty on the norms governing the security/ capital market and, therefore, would best serve the interest of strengthening and securing the capital market.” The court was disposing of a large number of appeals by Sebi against brokers. It allowed the appeals in most cases and set aside the appellate tribunal’s orders while restoring the orders of penalty imposed on the brokers by Sebi.
Business Standard, New Delhi, 29th February 2016
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