SEBI announces measures to curb financial fraud
Posted on: 14/Mar/2016 9:59:36 AM
Markets regulator SEBI (Securities and Exchange Board of India) barred wilful loan defaulters from raising public funds, taking control of listed firms and holding board positions. Defaulters will include individuals, companies, promoters and directors. They will also be debarred from setting up or being associated with market entities like brokerage firms and mutual funds. A report has said that SEBI may be also make it compulsory for listed companies to disclose their bad loans.
A meeting to this effect was held by SEBI`s board members, and was also addressed by Union Finance Minister Arun Jaitley. U.K. Sinha, Chairman of SEBI announced enhanced measures for surveillance of actions in the market place to check frauds.
Speaking about this, Mr. Sinha said, SEBI also plans to energise the Institutional Trading Platform for start-ups, REITs, Infrastructure Investment Trusts and Municipal Bond markets. (We are confident) that many startups will get listed soon, while REITs would also begin hitting the market following new measures announced in this year`s Union Budget.
The new rules on restraining wilful defaulters would come into effect immediately after they get notified and would apply to all listed firms and their promoters and directors. After the notification, all the persons would stand disqualified from all positions at listed companies. If somebody is declared by RBI, or by other orders, that he is a wilful defaulter, then it is very risky to allow that person, or company to raise money from retail persons in the market. They will not be allowed to raise money from the market. They will also be debarred from taking any position in a listed company. Such persons will also be declared not fit and proper under various intermediary regulations.
