{"id":79034,"date":"2025-12-22T11:38:40","date_gmt":"2025-12-22T06:08:40","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=79034"},"modified":"2025-12-22T11:38:40","modified_gmt":"2025-12-22T06:08:40","slug":"securities-markets-code-bill-2025-one-law-one-market-for-indias-capital-markets","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/securities-markets-code-bill-2025-one-law-one-market-for-indias-capital-markets\/","title":{"rendered":"Securities Markets Code Bill 2025: One Law, One Market for India\u2019s Capital Markets"},"content":{"rendered":"<h2><b>Securities Markets Code Bill 2025 Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Securities Markets Code (SMC), 2025, tabled in Parliament, proposes a sweeping overhaul of India\u2019s securities regulation framework. It aims to strengthen investor protection, reduce compliance burdens, improve regulatory governance, and promote ease of doing business.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Bill grants greater powers to Securities and Exchange Board of India (SEBI), decriminalises minor violations, and bolsters market infrastructure institutions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Crucially, it <\/span><b>consolidates<\/b><span style=\"font-weight: 400;\"> three existing laws\u2014the <\/span><b>Securities Contracts (Regulation) Act<\/b><span style=\"font-weight: 400;\">, 1956, <\/span><b>the SEBI Act,<\/b><span style=\"font-weight: 400;\"> 1992, and the <\/span><b>Depositories Act<\/b><span style=\"font-weight: 400;\">, 1996\u2014into a single, comprehensive code.<\/span><\/li>\n<\/ul>\n<h2><b>What the Securities Markets Code Bill, 2025 Replaces<\/b><\/h2>\n<ul>\n<li><span style=\"font-weight: 400;\">The Securities Markets Code Bill, 2025 proposes to merge and replace three existing securities laws\u2014the Securities Contracts (Regulation) Act, 1956 (SCRA), the SEBI Act, 1992, and the Depositories Act, 1996.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">These decades-old statutes contain <\/span><b>overlapping <\/b><span style=\"font-weight: 400;\">and <\/span><b>redundant provisions<\/b><span style=\"font-weight: 400;\"> that no longer align with today\u2019s technology-driven, complex markets.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">The consolidation\u2014first announced in Budget 2021\u2014aims to move toward a <\/span><b>single,<\/b><span style=\"font-weight: 400;\"> principle-based framework that reduces interpretative conflicts and improves legal certainty.<\/span><\/li>\n<li><b>Stronger and More Representative Regulator &#8211; <\/b><span style=\"font-weight: 400;\">Under the Code, the board of Securities and Exchange Board of India will expand from 9 to 15 members, adding representatives from the Central Government, the Reserve Bank of India, and more whole-time members to strengthen governance and expertise.<\/span><\/li>\n<li><b>Tighter Conflict-of-Interest Norms<\/b><span style=\"font-weight: 400;\"> &#8211; While earlier laws required disclosure of pecuniary interests, the new Code broadens the scope to include family members\u2019 interests, mandating disclosure and recusal to enhance transparency and integrity in decision-making.<\/span><\/li>\n<li><b>Investor-Centric Additions<\/b><span style=\"font-weight: 400;\"> &#8211; The Code formally incorporates <\/span><b>an Investor Charter<\/b><span style=\"font-weight: 400;\">, which earlier had no explicit statutory backing. It also introduces a <\/span><b>statutory Ombudsman<\/b><span style=\"font-weight: 400;\"> as an independent grievance redressal authority, distinct from enforcement wings\u2014addressing a long-standing gap in investor protection.<\/span><\/li>\n<\/ul>\n<h2><b>Key Provisions of the Securities Markets Code, 2025<\/b><\/h2>\n<ul>\n<li aria-level=\"1\"><b>Strengthening SEBI\u2019s Governance<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The Code empowers the government to remove SEBI Board members for conflicts of interest or convictions involving moral turpitude.\u00a0<\/span><\/li>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">It mandates <\/span><b>disclosure of direct or indirect interests<\/b><span style=\"font-weight: 400;\"> and expands the Board from 9 to 15 members, adding Central Government and RBI representation and more whole-time members.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Easier, Proportionate Compliance<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Contraventions are reclassified into two buckets.\u00a0<\/span><\/li>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Lesser violations (including fraudulent and unfair practices) are decriminalised and attract only civil penalties, while market abuse\u2014serious misconduct harming market integrity\u2014may invite both civil penalties and criminal action.\u00a0<\/span><\/li>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">This aims to reduce compliance burden while preserving deterrence.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Stronger Investor Protection<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The Code requires Securities and Exchange Board of India to specify an Investor Charter, standardise grievance redressal across intermediaries and issuers, and appoint Ombudsperson(s) for time-bound resolution.\u00a0<\/span><\/li>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">It also opens public consultations to investors, improving transparency and participation.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Simplified Rules for Regulated Entities<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">A consolidated registration framework is proposed for intermediaries and pooled investment vehicles.\u00a0<\/span><\/li>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">Stock exchanges, clearing corporations, and depositories are brought under a single code, with SEBI allowed to delegate registration functions to MIIs and SROs to streamline oversight.<\/span><\/li>\n<\/ul>\n<\/li>\n<li aria-level=\"1\"><b>Better Inter-Regulatory Coordination<\/b>\n<ul>\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The Bill enables coordination among regulators to ease listing of other regulated instruments and improve interoperability among Market Infrastructure Institutions (MIIs), supporting smoother market operations, improved investment climate, and stronger market-making.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b style=\"font-size: inherit;\">Aligning India\u2019s Securities Law with Global Best Practices<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Securities Markets Code Bill, 2025 incorporates international best practices by strengthening regulatory governance, accountability, and transparency.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It introduces regulatory impact assessments, ensures arm\u2019s-length separation between investigation and adjudication, establishes an Ombudsperson for investor grievances, and enables inter-regulatory coordination.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Experts note that by combining enhanced penalties, clearer adjudication, and greater regulatory flexibility for innovation, the consolidation of multiple laws into a single code marks a significant step toward a modern, globally aligned securities framework.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/securities-markets-code-smc-bill-2025-10430118\/#:~:text=The%20Bill%20provides%20an%20enabling,Market%20Infrastructure%20Institutions%20(MIIs)%20in\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a> | <a href=\"https:\/\/prsindia.org\/files\/bills_acts\/bills_parliament\/2025\/Securities_Markets_Code,2025.pdf\" target=\"_blank\" rel=\"nofollow noopener\">PRS<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Securities Markets Code Bill 2025 consolidates key securities laws, strengthens SEBI, decriminalises minor lapses, and aligns India\u2019s markets with global best practices.<\/p>\n","protected":false},"author":18,"featured_media":79048,"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-79034","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\/79034","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\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=79034"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/79034\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/79048"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=79034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=79034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=79034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}