Market regulator SEBI should be allowed to tap phones during fraud investigations, suggests panel
The regulatory body is at present allowed to access only call data records.
A committee set up by market regulator Securities and Exchange Board of India has suggested empowering the authority with powers to intercept phone calls so that it can crack down on financial fraud. The Committee on Fair Market Conduct, which was headed by former law secretary TK Viswanathan, recommended that the regulatory authority be given powers on par with the Central Board of Direct Taxes.
SEBI is currently allowed to access call data records during investigations. “The committee recommends that SEBI should seek power to intercept telephone calls and electronic communication, to collect strong evidence against repetitive offenders in cases including those of insider trading, front running or market manipulation,” the committee said. The document emphasised the need to ensure proper checks and balances in the execution of this move.
The panel also recommended empowering the watchdog with powers to take “direct action against perpetrators of financial fraud”.
The committee suggested that listed firms should incorporate policies to address leaks of unpublished price-sensitive information to counter manipulative and unfair trade practices.
“The listed company should have written policies and procedures for such inquiries, which are duly approved by board of directors of the company,” it said. “Listed companies should also have whistle-blower policies that make it easy for employees to report instances of leak of unpublished price sensitive information.”