The Union Law Ministry has shot down a proposal of Securities and Exchange Board of India (Sebi) seeking additional powers for itself to impose fines besides issuing suspension and termination orders to stock brokers, as well as annulling the central government’s power to frame rules on holding inquiries and imposing penalties against bourse violators.
The Finance Ministry had, initially, supported Sebi’s August 2017 proposal that it be given powers to levy monetary penalty in addition to issuing punitive directions. Sebi argued that a dual authority was "resulting in substantial delay and duplication of proceedings on the same cause of action". In October 2017, Sebi sent a second proposal suggesting that a "uniform procedure" be put in place for piloting all enforcement proceedings under the securities laws.
At present, Sebi is not empowered to impose monetary penalties - it merely issues disciplinary orders against errants while the monetary fine is adjudicated upon by a subordinate Sebi officer appointed by Sebi’s board. This board includes top officials from the Finance Ministry.