Finance minister Nirmala Sitharaman on Thursday introduced the Securities Markets Code Bill. 2025 in the Lok Sabha. proposing a unified legislative framework for India’s securities markets by repealing and merging three existing laws — the Sebi Act. 1992, the Depositories Act. 1996. and the Securities Contracts (Regulation) Act. 1956.
While introducing the bill. Sitharaman moved that it be referred to the Parliamentary standing committee on finance for further scrutiny. It is expected to submit its report by the first day of the next session, subject to the Speaker’s approval. The proposed Code seeks to consolidate and amend securities market laws to strengthen the regulatory architecture. enhance investor protection, and improve efficiency and ease of doing business.
It adopts a principle-based legislative approach while reinforcing the powers and governance framework of the Securities and (Sebi). To strengthen investor grievance redressal. the Bill provides for setting up an ombudsperson mechanism. It empowers Sebi to set up a regulatory sandbox to facilitate innovation in financial products and services under controlled conditions. The Code mandates higher standards of transparency and accountability. requiring board members to disclose any direct or indirect interests, including those of family members, related to matters under consideration, and to abstain from participation in such cases.
New grounds for removal of board members have also been introduced where conflicts of interest may prejudice their functions. The Bill proposes expanding the Sebi board to up to 15 members from the current nine. It decriminalises minor and procedural violations by converting them into civil penalties linked to unlawful gains or losses, aimed at cutting compliance burden while ensuring proportionate enforcement.