Securities Markets Code Bill: Standing Committee Report
Why in the news
The Parliamentary Standing Committee on Finance presented its report on the Securities Markets Code (SMC) Bill, which folds India’s main securities laws into one code.
Key facts
- Introduced: Lok Sabha, 18 December 2025, by Finance Minister Nirmala Sitharaman, then sent for scrutiny.
- Size: 157 clauses; over 85 suggestions accepted in clause-by-clause study.
- Consulted: RBI, SEBI, CAs, exchanges, investors, banks.
- Replaces: SEBI Act, 1992, SCRA, 1956, Depositories Act, 1996.
Committee’s recommendations
| Topic | Recommendation |
|---|---|
| Preamble | State aims: investor protection, market development, effective regulation |
| Clause 93(g) | Delete; hands SEBI too much power to create criminal offences |
| Criminal offences | Name all market-abuse offences in the Code itself |
| Delegated legislation | No delegation of essential legislative functions; define Parliament’s and SEBI’s roles |
| Investigation notices | Prior notice only for the person probed, except where evidence could be destroyed or tampered with |
| Ombudsperson | SEBI officer retained; 120-day limit for grievances |
| Surplus | Goes to the Consolidated Fund of India; 25% kept in a reserve fund, subject to a cap |
Concerns
- Critics say the surplus arrangement may blur the line between a regulatory fee and a tax.
Exam angle
- Three laws merged: SEBI Act, SCRA, Depositories Act.
- Numbers: 157 clauses, 85+ suggestions, 120 days, 25%.