Sebi mulls seeking power to tap calls of economic offenders

In a bid to bolster its evidence-gathering mechanism, market regulator Sebi is considering seeking powers from the government to intercept calls and electronic communications of those suspected of serious economic offences like insider trading.

Acting on recommendations made by a high-powered committee on fair market conduct, the capital markets regulator has prepared a proposal for its board to seek these powers by making necessary amendments in the concerned laws and regulations, a senior official said.

The committee, headed by former law secretary and Lok Sabha's ex-secretary general T K Viswanathan, had suggested last month that Sebi may seek direct power to intercept calls and electronic communication by ensuring proper checks and balances, like some other regulatory agencies.

After putting up the suggestion for a public consultation process, Sebi (Securities and Exchange Board of India) has listed recommendations for its board meeting scheduled next week to approach the government for these powers, which the regulator wants to exercise while following necessary protocols for maintaining right to privacy.

During the consultation process, it was pointed out by some entities that call interception is a direct encroachment of a person's liberty, which is guaranteed in

the Indian constitution and therefore Sebi needs to take specific order from the government for it.

Another feedback was about Sebi approaching judicial authorities on case-to-case basis, while some asserted the proposed powers should be seen vis-a-vis privacy laws and not be misused.

The panel had made the recommendation considering the difficulty faced in investigating serious cases, particularly relating to insider trading and front running -- which refer to benefitting through trading with prior access to price-sensitive information about listed companies.