In order to bolster its evidence-gathering
mechanism, market regulator SEBI is considering seeking powersPhone tapping 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. Justifying its proposal to seek phone-tapping powers, SEBI
has said it could investigate and recommend action only in around 40 cases
pertaining to prevention of insider trading in the last three years, out of
which action like disgorgement or impounding of ill-gotten gains could be taken
only in 12 cases of trading by insiders and the rest were disclosure-related.
Besides, criminal prosecution for insider trading has been
filed only in 12 cases till date and even in those the matter has not reached
the evidence stage and there has not been any conviction so far.
In India, some central law enforcement and regulatory
agencies are authorised by the government under provisions of the Indian
Telegraph Act to carry out call interception.These include Intelligence Bureau,
ED, CBDT, DRI, CBI, NIA and R&AW, as per SEBI's proposal.
In order to bolster its evidence-gathering mechanism, market regulator SEBI is considering seeking powersPhone tapping 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.
Justifying its proposal to seek phone-tapping powers, SEBI
has said it could investigate and recommend action only in around 40 cases
pertaining to prevention of insider trading in the last three years, out of
which action like disgorgement or impounding of ill-gotten gains could be taken
only in 12 cases of trading by insiders and the rest were disclosure-related.
Besides, criminal prosecution for insider trading has been
filed only in 12 cases till date and even in those the matter has not reached
the evidence stage and there has not been any conviction so far.
In India, some central law enforcement and regulatory
agencies are authorised by the government under provisions of the Indian
Telegraph Act to carry out call interception.These include Intelligence Bureau,
ED, CBDT, DRI, CBI, NIA and R&AW, as per SEBI's proposal.