Securities Market Code Bill 2025

The Securities Market Code Bill 2025 was tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman with the aim of unifying existing securities market laws to create a modern regulatory framework for investor protection and capital mobilisation.

Objectives and Provisions

• Consolidates three key acts: 
  • Securities Contracts (Regulation) Act, 1956
  • Securities and Exchange Board of India (SEBI) Act, 1992
  • Depositories Act, 1996
• Seeks to rationalise and consolidate existing provisions.
• Proposes to increase SEBI members from 9 to 15, including: 
  • Chairperson
  • Two officers appointed by the Central Government
  • One ex-officio member from RBI
  • 11 others, with at least five as whole-time members

Significant Changes

• Decriminalisation of minor and procedural violations to civil penalties to facilitate ease of doing business.
• Civil penalties for "unlawful gains or losses" with punishments limited to serious violations such as insider trading.
• No inspections for rule contraventions if eight years have passed since the date of violation.
• Mandates disclosure of direct or indirect interests by board members to prevent conflicts of interest.

Responses and Discussions

• Concerns over excessive powers to a single body were raised.
• Finance Minister noted that the Bill would be reviewed by the Standing Committee on Finance.
• The Speaker has the authority to refer bills to Parliamentary panels for further discussion.

Overall Aim

The Bill aims to strengthen investor protection, improve ease of doing business, and build a technology-driven securities market with reduced compliance burdens and enhanced regulatory governance.