For fast-track clampdown on erring firms, markets watchdog Sebi has decided to lay out strict timelines for completion of actions and create a central database of monitoring systems in the current fiscal.
As part of its proposed Plan of Action for the financial year 2015-16, the Securities and Exchange Board of India (Sebi) will also streamline its enforcement process by focusing on reducing the delays.
Besides, it would lay out strict timelines for completion of actions, put in place efficient follow-up mechanisms and create a central database of enforcement actions and monitoring systems.
Sebi is already working on further streamlining the enforcement process to ensure uniformity in approach and improve the efficiency of enforcement proceedings across the organisation, the regulator had said after board meeting last month.
Sebi is also focusing on developing capabilities to effectively utilise the additional enforcement powers vested to it through the Securities Laws (Amendment) Act, 2014.
"The focus in this regard would be to enforce Sebi orders imposing monetary penalties and directions for disgorgement and refund of money by using the newly vested recovery powers."
"The effective enforcement of orders by recovering unpaid penalties along with the provision for filing criminal prosecution before special courts setup to hear only securities laws related matters, will serve as a deterrent and improve the quality of enforcement actions initiated by Sebi," the regulator said.
Stepping up its crackdown against illicit fund-raising activities in a big way, Sebi busted more than 150 cases of frauds against gullible investors involving close to Rs 13,000 crore (Rs 130 billion) in the last fiscal ended March 31.
These included over 100 cases of deemed public issues, involving an amount of over Rs 2,200 crore (Rs 22 billion) and more than 45 cases of illicit Collective Investment Schemes (CIS) worth over Rs 9,500 crore (Rs 95 billion) in the fiscal year 2014-15. This marks a significant rise from the previous fiscal.
An analysis of the orders passed by Sebi shows that the majority of orders against deemed public issues were in West Bengal, Uttar Pradesh, Madhya Pradesh and Odisha.
The same for CIS activities are in Tamil Nadu, Madhya Pradesh, Maharashtra, Uttar Pradesh and West Bengal.
The lack of banking and financial services, as also gaps in laws, has led to a proliferation of such illegal fund raising in large parts of the country.
With the Sebi coming across hundreds of complaints from aggrieved investors, the watchdog has stepped up its enforcement and prosecution activities.
