Securities Markets Code 2025 to simplify laws, protect investors

The Securities Markets Code, 2025 aims to simplify laws and protect small investors, said Parliamentary panel chairman Bhartruhari Mahtab. The committee has recommended a longer cooling-off period and investigation timeline in its report.

The proposed Securities Markets Code, 2025 seeks to simplify securities laws while strengthening protection for the growing number of small investors participating in the capital markets, Bhartruhari Mahtab, Chairman of the Parliamentary Standing Committee on Finance, said on Friday.

Speaking to ANI after the committee presented its report on the Securities Markets Code, 2025, Mahtab said the committee's primary objective was to create a simpler and more investor-friendly legal framework by consolidating existing securities laws.

"Security market report has been placed. What we have done is an amalgamation of three acts through which we have tried to make the law a little simpler and investor-friendly. That is the focus of ours. Because a large number of small traders are now trading in the securities market, our basic approach has been to give them protection," Mahtab said.

Key Recommendations by the Committee

He said the committee has also recommended extending the cooling-off period to two years instead of the one year proposed in the Bill.

"And we have also decided that the cooling-off period should be of two years instead of one year as was suggested in the bill earlier," he added.

On investigations, the committee has recommended increasing the timeline from 180 days to 360 days.

"The investigation aspect also, we have increased from 180 days to 360 days," Mahtab said.

Enhanced Role for SEBI with Safeguards

The committee submitted its report on Thursday to the parliament. It has broadly backed the Securities Markets Code, 2025, while recommending a sharper and more accountable regulatory framework with the Securities and Exchange Board of India (SEBI) at the centre of market supervision, investigation and enforcement.

According to the report, the proposed Code entrusts additional statutory responsibilities to SEBI and expands the regulator's powers to protect investors, regulate the securities market and lay down guiding principles for implementing the new law.

The committee has recommended that SEBI continue to exercise wide-ranging regulatory, supervisory, investigative and enforcement powers while introducing clearer statutory safeguards to ensure that exceptional powers are exercised within defined limits.

Among its key recommendations, the panel said the Code should be redrafted to allow SEBI to initiate inspections or investigations after the prescribed limitation period only in narrowly defined circumstances.

The report further stated that "A mere reference by an investigating agency should not, by itself, constitute a sufficient ground for reopening a matter after the expiry of eight years."

The committee's recommendations seek to simplify India's securities law framework while strengthening investor protection and improving regulatory accountability under the proposed Securities Markets Code, 2025. (ANI)

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