Bill on single framework for securities regulations tabled

FINANCE MINISTER NIRMALA SITHARAMAN on Thursday tabled the Securities Market Code (SMC) Bill, 2025,in the Lok Sabha, proposing a sweeping consolidation of the country's securities laws.

- JOYDEEP GHOSH

The Bill seeks to merge three existing legislations—the Securities Contracts (Regulation) Act, 1956; the Securities and Exchange Board of India (Sebi) Act, 1992; and the Depositories Act, 1996—into a single, unified code. The legislation will be referred to a Parliamentary standing committee for further scrutiny.

First proposed in the Union Budget 2021-22, the SMC aims to remove obsolete and redundant provisions, eliminate overlaps, and introduce consistent regulatory processes across the securities market. At the same time, it seeks to strengthen the regulatory architecture, enhance investor protection, and improve efficiency and ease of doing business in the capital markets.

According to the Bill, the SMC is designed to reinforce the powers and governance framework of Sebi, while shifting towards a principle based legislative approach.

The initiative mirrors recent regulatory consolidation efforts, including the proposed New Income Tax Code, the Reserve Bank of India's exercise of merging 9,445 circulars into 244 master circulars, and Sebi's own drive to simplify rules governing brokers and other market intermediaries.

The proposed changes will have wide-ranging implications for Sebi, market infrastructure institutions (MIIs) and investors.