The Securities and Exchange Board of India is reportedly preparing to ask the Indian Government to change the SEBI Act in its favour.

The Business Standard quotes a senior official as saying: "We want to insert a clarification that the discretion to impose a penalty has always remained with the adjudicating officer.” The regulator's AOs currently lack the lordly power that it wants them to have over regulated firms.

The kind of 'clarification' that some of SEBI's board members are about to seek is along the lines of a previous one 2013, when the Indian legislature provided SEBI with the express permission (not previously stated anywhere in SEBI Act 1992) to pass binding orders that called on firms to 'disgorge' ill-gotten profits.

The recent Supreme Court decision in the case of Roofit Industries restricted SEBI's discretionary powers to impose penalties under s15J SEBI Act 1992. A more recent case, which has also been referred to that court, calls that decision into question and its eventual outcome might have a bearing on the matter. In February the court said that the Act and its regulations that governed penalties for manipulative or fraudulent practices were "somewhat unclear if not a confused picture that emanates from parallel provisions."