Securities Markets Code Bill: Reshaping the Future of Indian Capital Markets

The Securities Markets Code (SMC) Bill proposes an eight-year limit on securities market inspections to prevent prolonged regulatory overhang. It introduces a time-bound enforcement framework for Sebi and expands investor protection through an Ombudsperson-led grievance mechanism, reshaping India's capital market regulations.

The recently introduced Securities Markets Code (SMC) Bill proposes a significant overhaul of India's securities market regulatory framework. The Bill sets an eight-year time limit for inspections by the capital markets regulator, Sebi, to prevent prolonged regulatory uncertainties.

Notably, cases with a systemic impact are exempt from this limitation, ensuring comprehensive oversight remains intact. Additionally, the Bill mandates Sebi to complete investigations within 180 days, while a new Ombudsperson-led grievance redressal system aims to strengthen investor protection. The legislation also requires Sebi to allocate funds for operational expenses effectively.

As the Bill moves to a Standing Committee for further consultation, it is poised to consolidate existing securities laws, presenting significant implications for the regulatory landscape. While this initiative promises legal certainty and expedited processes, it may require additional manpower and resources for successful implementation.

(With inputs from agencies.)