Bring SEBI under the Ambit of Limitation Act, Requests ANMI
Moneylife Digital Team 18 January 2022
To avoid unnecessary delays in legal matters, about 900 stockbrokers want market regulator Securities and Exchange Board of India (SEBI) to be brought under the ambit of the law of limitation. 
 
In a representation to Ajay Seth, secretary in the department of economic affairs (DEA), the Association of National Exchanges Members of India (ANMI), says, "While initiating the proceedings against any matter by SEBI, the SEBI Act 1992 does not prescribe any period of limitation for initiation of proceedings. This results in several proceedings being initiated by SEBI several years after the alleged violation, resulting in unnecessary hardship and grave prejudice to market participants and affects their ability to respond to such show-cause notices effectively."
 
At the same time, ANMI says, market intermediaries are covered under the ambit of the limitation act. Further, other laws like the Income-tax Act have a time limit prescribed for issuing notices and do not give such wide and sweeping powers to the department that can likely be used as a tool for harassment. 
 
According to the Association, in several cases, the Securities Appellate Tribunal (SAT) had held that long delays in issuing a show-cause notice are fatal to the proceedings and has set aside SEBI's orders on that short ground alone without even going into the merits of the case.
 
"It is, therefore, necessary that appropriate amendments be brought about in SEBI Act, 1992 and time limitation be imposed upon SEBI in terms of the outer limit for issuance of show cause notice. Such time limitation being imposed would greatly improve the efficiency of the securities market regulator and at the same time align the Indian securities market with the practice being followed across the major capital market world over," ANMI says.
 
Here is the letter sent by ANMI to the secretary, DEA...
 
 
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