The Parliamentary Standing Committee on Finance will meet twice on Thursday to discuss the Securities Markets Code Bill, 2025, which aims to merge three securities laws, strengthen SEBI's regulatory capacity, and promote ease of doing business.
The Parliamentary Standing Committee on Finance will meet twice on Thursday to discuss the Securities Markets Code Bill, 2025, which proposes to merge the Securities Contracts (Regulation) Act, 1956, the SEBI Act, 1992, and the Depositories Act, 1996 into a single statute.
In its first sitting, scheduled at 11 am, the Committee will hear oral evidence from representatives of the Ministry of Law and Justice (Department of Legal Affairs and Legislative Department) on the Bill. In the second sitting at 2 pm, representatives of the Ministry of Finance (Department of Economic Affairs) will appear before the Committee for a clause-by-clause examination of the proposed legislation.
Key Provisions of the Proposed Code
The Standing Committee is chaired by BJP MP Bhartruhari Mahtab. The Securities Markets Code seeks to establish a principle-based legislative framework aimed at reducing compliance burdens, strengthening regulatory governance, and supporting the growth of technology-driven securities markets, thereby promoting ease of doing business.
Strengthening Regulatory Framework
The Bill proposes to strengthen SEBI's regulatory capacity by expanding the Board from nine to up to fifteen members, while mandating a transparent and consultative approach for issuing subordinate legislation. To enhance credibility and integrity in decision-making, the Code introduces strict conflict-of-interest norms, requiring Board members to disclose any direct or indirect interests and to recuse themselves where conflicts arise.
The Code spans subjects including board composition, independence, conflict management, transparency, regulatory sandboxing, investor protection, governance of market infrastructure institutions, and Ease of Doing Business.
Reforming Penalties and Protecting Investors
The Code decriminalises minor, procedural, and technical violations, converting them into civil defaults. Criminal liability is restricted to serious offences such as market abuse, non-compliance with quasi-judicial orders, and non-cooperation during investigations.
Investor protection is further strengthened through measures to promote investor education, awareness, and time-bound grievance redressal, including the introduction of an Ombudsperson mechanism.
Promoting Market Innovation
The Code also empowers SEBI to establish a Regulatory Sandbox for the development of a new product, contract or service in the securities markets, along with any exemptions or modifications.
The Finance Minister proposed sending the Securities Markets Code (SMC) Bill, 2025, to the Standing Committee for further examination. (ANI)
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