JOIN US Sebi Chairman U K Sinha on Tuesday stoutly defended the new consent settlement mechanism norms issued early this month -- which is effective retrospectively -- asserting that the new rules are in sync with the law and they will stand the legal scrutiny too.
Speaking to reporters on the sidelines after launching the interest rate futures by the National Stock Exchange here, Sebi chief said, "Our policies are valid and legal, and they will stand the legal scrutiny...Let's also not forget that the point of settlement or consent proceeding has been on our table since 2007. Some people have challenged that in various courts and we have a few judgements in our favour."
He also pointed out that even as the original Sebi Act does not directly mention about consent proceeding or settlement proceeding, the 2002 amendment of the Sebi Act does it.
"As such, our suggestion to the government was that when the Sebi Act was getting amended, to avoid any controversy and provide certainty, let us also specially mention about the consent mechanism and accordingly it has been effective as by way of clarification from 2007-08," Sinha said.
It may be noted that on January 9 this year, Sebi had issued the final norms governing consent settlement under which it barred cases involving serious offences out of the purview with retrospective effect from April 20, 2007, the day when Sebi's existing consent settlement system was introduced.
He further said the new consent norms were issued when the Sebi ordinance was in force. When asked about the need for these retrospective changes, he said, "We have to understand that Sebi came out with the new regulations when the ordinance was in force and therefore these regulations have the force of law."
On the twice-promulgated Sebi ordinance, which got lapsed last week, Sinha said it will have implications (on the functioning of Sebi). "Let's see how it proceeds. It depends on the Parliament and the government to decide what powers they eventually want to give it to Sebi," he said.
The ordinance, which has given search and seizure powers to the regulator, apart from many other enabling measures, has lapsed as the government could not get the bill passed as both the monsoon and winter sessions were a near washout.