{"id":78621,"date":"2025-12-19T11:02:24","date_gmt":"2025-12-19T05:32:24","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=78621"},"modified":"2025-12-19T11:22:22","modified_gmt":"2025-12-19T05:52:22","slug":"securities-markets-code-bill-2025-towards-a-unified-principle-based-securities-regulation","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/securities-markets-code-bill-2025-towards-a-unified-principle-based-securities-regulation\/","title":{"rendered":"Securities Markets Code Bill 2025 &#8211; Towards a Unified, Principle-Based Securities Regulation"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Securities Markets Code Bill 2025 Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Union Finance Minister recently tabled the Securities Markets Code Bill 2025 in the Lok Sabha, as announced earlier in the <\/span><b>Union Budget 2021\u201322<\/b><span style=\"font-weight: 400;\">. The Bill has been referred to the Standing Committee on Finance for detailed examination.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It seeks to <\/span><b>consolidate, rationalise and modernise<\/b><span style=\"font-weight: 400;\"> India\u2019s securities market laws to enhance investor protection, ease of doing business, and capital mobilisation in a technology-driven financial ecosystem.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Securities Market in India<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is a vital part of the nation&#8217;s financial system, <\/span><b>facilitating the flow of capital <\/b><span style=\"font-weight: 400;\">from savers to those who need it for productive investments.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is a sophisticated, technology-driven ecosystem <\/span><b>regulated primarily<\/b><span style=\"font-weight: 400;\"> by the Securities and Exchange Board of India (<\/span><b>SEBI<\/b><span style=\"font-weight: 400;\">).<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Core Features of the Bill<\/b><\/h2>\n<ul>\n<li><b>Consolidation of securities laws:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The Bill <\/span><b>replaces <\/b><span style=\"font-weight: 400;\">three major legislations &#8211; the Securities Contracts (Regulation) Act (SCRA), 1956; the SEBI Act, 1992; and the Depositories Act, 1996.<\/span>\n<ul>\n<li><b>SEBI Act, 1992<\/b><span style=\"font-weight: 400;\">: It established SEBI as an independent statutory body and endowed it with regulatory and enforcement authority.<\/span><\/li>\n<li><b>SCRA, 1956<\/b><span style=\"font-weight: 400;\">: It provides the legal framework for the regulation of stock exchanges and contracts in securities, aiming to prevent undesirable speculation.<\/span><\/li>\n<li><b>Depositories Act, 1996<\/b><span style=\"font-weight: 400;\">: It legalises the electronic (dematerialized) holding and transfer of securities, reducing the risks associated with physical certificates.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-weight: 400;\">The objective is to <\/span><b>eliminate overlap<\/b><span style=\"font-weight: 400;\">, duplication, and obsolete provisions and create a <\/span><b>uniform <\/b><span style=\"font-weight: 400;\">securities law framework.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Expanded and strengthened SEBI board:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Board strength increased from <\/span><b>9 to 15<\/b><span style=\"font-weight: 400;\"> members.<\/span><\/li>\n<li><b>Composition <\/b><span style=\"font-weight: 400;\">&#8211; Chairperson, 2 Central Government nominees, 1 RBI nominee (ex-officio), and 11 other members (minimum 5 whole-time members, up from 3).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The objective is institutional capacity enhancement and <\/span><b>improved regulatory governance<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Decriminalisation and rationalisation of offences:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Minor, procedural and technical violations shifted to <\/span><b>civil penalties.<\/b><\/li>\n<li><span style=\"font-weight: 400;\">Criminal punishment restricted to serious offences such as <\/span><b>insider trading<\/b><span style=\"font-weight: 400;\"> and trading on material non-public information.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It aligns with <\/span><b>ease of doing business<\/b><span style=\"font-weight: 400;\"> and compliance burden reduction.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Classification of contraventions:<\/b>\n<ul>\n<li><b>Category I<\/b><span style=\"font-weight: 400;\"> \u2013 Fraudulent and unfair trade practices &#8211; No criminal liability, civil penalties applicable.<\/span><\/li>\n<li><b>Category II<\/b><span style=\"font-weight: 400;\"> \u2013 \u201cMarket Abuse\u201d &#8211; Serious violations affecting market integrity and public interest. May attract civil penalties and criminal liability.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Time limitation on inspection: <\/b><span style=\"font-weight: 400;\">No inspection permitted if 8 years have elapsed since the date of contravention. It ensures<\/span><b> legal certainty<\/b><span style=\"font-weight: 400;\"> and closure.<\/span><\/li>\n<li><b>Conflict of interest and accountability:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Mandatory disclosure of direct and indirect interests, including those of family members.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Members must recuse themselves in case of conflict.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">SEBI empowered to remove board members for non-compliance or conflict of interest.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">This provision <\/span><b>strengthens ethical governance<\/b><span style=\"font-weight: 400;\"> and transparency.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Investor protection measures:<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Mandatory <\/span><b>investor charter <\/b><span style=\"font-weight: 400;\">by SEBI.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Establishment of investor grievance redressal mechanism.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Direction to market intermediaries and issuers to adopt similar mechanisms.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It will <\/span><b>reinforce trust <\/b><span style=\"font-weight: 400;\">and retail participation.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Delegation and regulatory coordination:\u00a0<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">SEBI is empowered to delegate registration-related functions to Market Infrastructure Institutions (MIIs) and Self-Regulatory Organisations (SROs).<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Framework for inter-regulatory coordination for listing of \u201cother regulated instruments\u201d, interoperability across market platforms.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The provision supports <\/span><b>market deepening<\/b><span style=\"font-weight: 400;\"> and innovation.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Key Challenges and Way Forward<\/b><\/h2>\n<ul>\n<li><b>Opposition raised concerns over:\u00a0<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Excessive concentration of powers in SEBI, potential violation of the principle of separation of powers.<\/span><\/li>\n<li><b>Government response<\/b><span style=\"font-weight: 400;\">: Issues can be examined by the Standing Committee on Finance.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Risk of over-centralisation of regulatory authority<\/b><span style=\"font-weight: 400;\">: Clear articulation of checks and balances on SEBI\u2019s powers.<\/span><\/li>\n<li><b>Ambiguity regarding subordinate legislation<\/b><span style=\"font-weight: 400;\">: Transparent and consultative framing of subordinate legislation (SEBI rules, regulations, circulars).<\/span><\/li>\n<li><b>Balancing: <\/b><span style=\"font-weight: 400;\">Faster adjudication with effective deterrence. Capacity building for effective enforcement under the new code.<\/span><\/li>\n<li><b>Ensuring accountability:<\/b><span style=\"font-weight: 400;\"> While delegating powers to MIIs and SROs. Periodic review to align with evolving fintech and digital markets.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Securities Markets Code Bill 2025 represents <\/span><b>a major structural reform <\/b><span style=\"font-weight: 400;\">aimed at creating a simplified, coherent and future-ready securities regulatory framework.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While the Bill seeks to <\/span><b>balance <\/b><span style=\"font-weight: 400;\">market<\/span><b> efficiency with integrity<\/b><span style=\"font-weight: 400;\">, its ultimate success will depend on robust parliamentary scrutiny, transparent rule-making, and effective institutional safeguards against regulatory overreach.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/www.thehindu.com\/business\/fm-tables-bill-unifying-securities-market-rules-in-lok-sabha\/article70412621.ece#:~:text=Finance%20Minister%20Nirmala%20Sitharaman%20on,Committee%20on%20Finance%20for%20review.\" target=\"_blank\" rel=\"nofollow noopener\"><b>TH<\/b><\/a>\u00a0<b>| <\/b><a href=\"https:\/\/indianexpress.com\/article\/business\/markets-code-tabled-in-lok-sabha-key-provisions-of-bill-that-allows-removal-of-sebi-board-member-over-conflict-of-interest-10427433\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Securities Markets Code Bill 2025 seeks to consolidate, rationalise and modernise India\u2019s securities market laws.<\/p>\n","protected":false},"author":19,"featured_media":78642,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,4295,22,59],"class_list":{"0":"post-78621","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-securities-markets-code-bill-2025","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/78621","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=78621"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/78621\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/78642"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=78621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=78621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=78621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}