Securities Markets Code 2025: Key Changes to SEBI Law
Why in the news
A consolidating code to overhaul securities regulation was sent for detailed committee scrutiny, raising both gains and concerns about SEBI’s powers.
Key facts
- Laws subsumed: Securities Contracts (Regulation) Act 1956, SEBI Act 1992 and Depositories Act 1996.
- Board: strength raised from 9 to 15; up to six independent part-time members; wider conflict-of-interest definition, with the Centre able to remove members whose conflicts hurt SEBI’s working.
- Adjudication: officers must be whole-time members or SEBI officers; an adjudicator cannot have probed the same case earlier.
- Limitation: eight years from the alleged offence, except for systemic market impact or cases referred by investigating agencies.
- Penalties: more monetary penalties, but imprisonment stays for serious offences such as insider trading, fraud and price manipulation.
- Investor protection: compulsory grievance redress, an ombudsperson appointed by SEBI and an Investor Charter.
| Area | Proposal |
|---|---|
| SEBI board | 9 to 15; up to six independent part-time members |
| Investigation window | Eight years, with exceptions |
| Penalty approach | More monetary penalties; jail for serious offences |
| PMLA link | Market abuse can attract ED investigation |
| MIIs | Frame bye-laws; may get delegated registration powers |
| Investors | Grievance redress, ombudsperson, Investor Charter |
Assessment
- Positives: a unified framework, broader conflict safeguards, clearer investigation timelines and stronger investor protection.
- Concerns: heavy concentration of powers with SEBI and a need for clearer checks and balances.
Exam angle
- Referred to: Parliamentary Standing Committee on Finance.
- SEBI board size: 9 raised to 15.
- Investigation limitation period: eight years.
- MIIs recognised: stock exchanges, clearing corporations, depositories and any new category the Centre notifies.