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SEBI seeks power to intercept calls

By IndianMandarins- 13 Sep 2018
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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.

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