Review of laws to check illegal trading in shares likely

Press Trust of India
Posted: Saturday, Jul 11, 2009 at 2309 hrs IST
Updated: Saturday, Jul 11, 2009 at 2309 hrs IST

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New Delhi: The government may consider revisiting laws to check illegal trading in shares and has asked state governments to include special mechanism in the judicial system for the purpose, finance minister Pranab Mukherjee said on Friday.

“There is no hesitation to have a fresh look and revisiting the issue,” he said in Lok Sabha when asked by BJP member Bhola Singh whether there was a need for making the existing laws more stringent in view of several irregularities occurring in the stock markets in the recent past.

He said the state governments have also been asked to incorporate special mechanisms in their judicial systems to check illegalities in the stock trading system. Replying to a question by Jagdish Sharma (JD-U), Mukherjee said government was “not contemplating” setting up of a special agency to deal with share market irregularities. It was “totally against” the functioning and practices of all global stock exchanges, he said.

Describing upgradation of laws to prevent such instances as a “continuous exercise,” he said the share markets were regulated by Securities Contracts Regulation Act 1956 and the Securities and Exchange Board of India (Sebi) Act 1992.

Maintaining that the 1992 law was enacted and Sebi established on the recommendations of Parliamentary Committees which went into the multi-crore stock scams in the 1990s, Mukherjee said Sebi has been receiving complaints regarding illegal trading of shares in various parts of the country and taking action on a regular basis. The governing bodies of some state exchanges have been “replaced or suspended for indulging in illegal trading,” he said, adding that appropriate regulatory mechanisms have already been evolved to check such illegal practices.

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