Sebi to set up a panel to suggest changes to SCRA
NEW DELHI : The Securities and Exchange Board of India (Sebi) plans to form an expert committee to suggest changes to the 67-year-old Securities Contract Regulation Act (SCRA), two people with direct knowledge of the matter said. The changes are expected to be made to simplify the law and weed out redundant provisions. Several changes will be discussed for various aspects of the Act, including Sebi’s penalty powers and the regulatory framework for market institutions, according to the people.
SCRA is a key legislation under which Sebi and the stock exchanges derive various operational powers. Over the years, the Act has been amended several times to accommodate newer positions since it was passed by Parliament in 1956. From a derivatives market perspective, SCRA is a crucial law as it defines the basic rules for such contracts.
Sebi functions under two types of laws: rules and regulations. Rules, such as the Sebi Act, are enacted by Parliament and can only be amended by it. On the other hand, Sebi, in its role as a markets regulator, issues regulations that can be revised internally.
SCRA falls under the category of rules that can be amended only by Parliament. An email sent to a spokesperson for Sebi remained unanswered till the time of going to press. “Based on the expert committee report, Sebi will recommend to the government possible tweaks for SCRA," one of the two people cited above said, requesting anonymity.
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