SEBI Empowered with Balance: New Recommendations on Securities Markets Code, 2025

The Finance Committee supports the Securities Markets Code 2025 but calls for SEBI's expanded powers to come with stricter checks. It emphasizes accountability, transparency, and precise regulations to ensure effective market oversight while maintaining SEBI's credibility and preventing misuse of powers.

The Standing Committee on Finance has expressed its support for the Securities Markets Code, 2025, while advocating for a more accountable regulatory framework with the Securities and Exchange Board of India (SEBI) playing a central role. The committee's report highlights SEBI's additional statutory responsibilities to better safeguard investors and regulate the securities market under the proposed legislation.

Central to the committee's recommendations is maintaining SEBI's robust operational authority, bolstered by clear statutory guardrails. It underscores SEBI's position as the 'principal regulator of the securities market,' emphasizing its need to exercise a comprehensive range of regulatory, supervisory, investigative, and enforcement powers.

The panel also advises more stringent controls over SEBI's exceptional authority to prevent arbitrary actions. Proposed changes suggest that SEBI's ability to initiate investigations beyond the standard limitation period be restricted to clearly defined circumstances, advocating that any reopening of cases after eight years requires reasonable grounds of serious market abuse or systemic risk.

The committee also supports SEBI's expanded rule-making abilities, particularly concerning market infrastructure governance, providing flexibility to adapt to evolving market conditions. However, it insists on public and parliamentary scrutiny to ensure regulatory transparency.

While welcoming the integration of securities law, the panel calls for precision in legislative drafting alongside stronger institutional oversight. It recommends that SEBI's appointment, adjudication, and delegation procedures be fortified with transparent, procedural, and well-separated functions to uphold its independence, credibility, and effectiveness.

Overall, the Standing Committee advocates for SEBI to be endowed with enhanced statutory authority under the new code, suggesting that these powers are complemented by stringent rules, explicit language, and objective standards to prevent misuse, thereby boosting investor confidence. (ANI)