New Delhi, December 18 (ANI): Union Finance Minister Nirmala Sitharaman on Thursday introduced the Securities Markets Code (SMC) Bill, 2025 in the Lok Sabha, marking a major overhaul of India’s capital market regulatory framework.
The proposed Code seeks to consolidate and replace three legacy laws—the Securities Contracts (Regulation) Act, 1956; the SEBI Act, 1992; and the Depositories Act, 1996—into a single, unified statute, aiming to modernise regulation, strengthen investor protection, and enhance capital mobilisation.
According to government sources, the SMC Bill establishes a principle-based legislative framework designed to reduce compliance burdens, improve regulatory governance, and support technology-driven securities markets, thereby promoting ease of doing business in a fast-growing economy.
Key features of the Bill include:
- Expansion of SEBI’s Board from nine to up to fifteen members to strengthen regulatory capacity.
- Mandatory consultative and transparent rule-making for issuing subordinate legislation.
- Strict conflict-of-interest norms, requiring disclosures and recusals by Board members where applicable.
- A streamlined enforcement framework with a single adjudication process, clear separation between investigation and adjudication, and prescribed timelines for investigations and interim orders.
- Decriminalisation of minor and technical violations, converting them into civil defaults, while retaining criminal liability for serious offences such as market abuse and non-compliance with quasi-judicial orders.
- Enhanced investor protection mechanisms, including investor education initiatives, time-bound grievance redressal, and the introduction of an Ombudsperson mechanism.
- Empowerment of SEBI to establish a Regulatory Sandbox to encourage innovation in financial products and services.
- A framework for inter-regulatory coordination to facilitate seamless listing of other regulated instruments.
Government sources described the Bill as a historic milestone, noting that such a comprehensive review of securities market laws is being undertaken for the first time.
The Finance Minister has proposed referring the Securities Markets Code Bill, 2025 to a Parliamentary Standing Committee for further examination.
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