FM Sitharaman introduces the Securities Markets Code Bill 2025: Key highlights explained

Synopsis: To​‍​‌‍​‍‌​‍​‌‍​‍‌ simplify regulation, speed up enforcement, and enhance investor protection, Nirmala Sitharaman, FM, has introduced the Securities Markets Code Bill 2025 to consolidate major market laws into a single ​‍​‌‍​‍‌​‍​‌‍​‍‌framework.

Finance​‍​‌‍​‍‌​‍​‌‍​‍‌ Minister Nirmala Sitharaman tabled the Securities Markets Code Bill, 2025, in the Lok Sabha, signalling the intent to make India’s securities market regulation simpler and more efficient. The legislation intends to do away with several changes with one comprehensive law to have a quicker, clearer, and more investor-friendly ​‍​‌‍​‍‌​‍​‌‍​‍‌regulation.

About the Bill

The​‍​‌‍​‍‌​‍​‌‍​‍‌ Securities Markets Code Bill, 2025, aims to repeal and combine three important laws that regulate capital markets in the least overlapping and most efficient way. These three laws are the SEBI Act, 1992, the Depositories Act, 1996, and the Securities Contracts (Regulation) Act, 1956. Instead of having different laws with overlapping provisions, the Bill brings a single code for the regulation of securities markets in India.

The new structure revolves around the Securities and Exchange Board of India (SEBI), which is called the “Board” in the Bill. Some parts of the act have been modernised, and some provisions that were redundant and already covered by other laws have been removed, which is expected to bring greater clarity and ease to the regulation process for companies, intermediaries, and investors.

The Bill, in fact, shifts to a principle-based regulatory framework, which mainly allows SEBI to have the discretionary powers needed to efficiently tackle the issues arising from market developments, without legislative changes being required every ​‍​‌‍​‍‌​‍​‌‍​‍‌time.

Objectives of the Bill

Basically,​‍​‌‍​‍‌​‍​‌‍​‍‌ the Bill is intended to revamp the regulatory system of the market by making it more efficient and by introducing various measures that would enhance the protection of the investor and the business environment. Indeed, the Bill is full of reforms, which are supposed to bring about such changes.

One of the features of the Bill is the establishment of a single mechanism of adjudication for all actions of a quasi-judicial nature and the provision of clear timelines for investigations and interim orders, thus allowing enforcement to be extended more quickly to these areas. It is expected that minor procedural violations will be treated as civil defaults with the imposition of money penalties, while serious offences such as market abuse and non-cooperation with investigations will be subject to the continuation of criminal proceedings.

In order to enhance transparency, members of the SEBI board will have to declare any conflicts of interest during the decision-making process. Another place where the Bill introduces the Ombudsman institution as a channel of investor grievances and empowers SEBI to install regulatory sandboxes as a means to oversee innovations, while at the same time ensuring control over them.

Overall,​‍​‌‍​‍‌​‍​‌‍​‍‌ the Securities Markets Code Bill, 2025, plans to change the various securities laws of India to one single law and, as a result, makes SEBI more powerful and improves investor protection. With the help of these changes: quicker enforcement, more straightforward rules, and improved grievance redressal, the capital markets would become cleaner, more efficient, and ​‍​‌‍​‍‌​‍​‌‍​‍‌investor-friendly.

Written by Satyajeet Mukherjee

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