Securities Markets Code aims to simplify laws, strengthen protection for small investors: Parliamentary panel chief
New Delhi, July 24
The proposed Securities Markets Code, 2025 seeks to simplify securities laws while strengthening protection for the growing number of small investors participating in the capital markets, Bhartruhari Mahtab, Chairman of the Parliamentary Standing Committee on Finance, said on Friday.
Speaking to ANI after the committee presented its report on the Securities Markets Code, 2025, Mahtab said the committee's primary objective was to create a simpler and more investor-friendly legal framework by consolidating existing securities laws.
"Security market report has been placed. What we have done is an amalgamation of three acts through which we have tried to make the law a little simpler and investor-friendly. That is the focus of ours. Because a large number of small traders are now trading in the securities market, our basic approach has been to give them protection," Mahtab said.
He said the committee has also recommended extending the cooling-off period to two years instead of the one year proposed in the Bill.
"And we have also decided that the cooling-off period should be of two years instead of one year as was suggested in the bill earlier," he added.
On investigations, the committee has recommended increasing the timeline from 180 days to 360 days.
"The investigation aspect also, we have increased from 180 days to 360 days," Mahtab said.
The committee submitted its report on Thursday to the parliament. It has broadly backed the Securities Markets Code, 2025, while recommending a sharper and more accountable regulatory framework with the Securities and Exchange Board of India (SEBI) at the centre of market supervision, investigation and enforcement.
According to the report, the proposed Code entrusts additional statutory responsibilities to SEBI and expands the regulator's powers to protect investors, regulate the securities market and lay down guiding principles for implementing the new law.
The committee has recommended that SEBI continue to exercise wide-ranging regulatory, supervisory, investigative and enforcement powers while introducing clearer statutory safeguards to ensure that exceptional powers are exercised within defined limits.
Among its key recommendations, the panel said the Code should be redrafted to allow SEBI to initiate inspections or investigations after the prescribed limitation period only in narrowly defined circumstances.
The report further stated that "A mere reference by an investigating agency should not, by itself, constitute a sufficient ground for reopening a matter after the expiry of eight years."
The committee's recommendations seek to simplify India's securities law framework while strengthening investor protection and improving regulatory accountability under the proposed Securities Markets Code, 2025.
— ANI
Reader Comments
Good initiative but I'm skeptical. SEBI already has huge powers - giving them more without proper checks could be risky. The committee says they're adding safeguards but we've heard that before. Let's see the fine print before celebrating. Also, 360 days for investigation? Thoda zyada ho gaya na? 😒
As someone who lost money in the NSEL fiasco, I welcome this move. The 8-year limit for reopening cases is particularly important - too many investors have been waiting endlessly for justice. But I hope they also reduce the burden of proof for small investors. We don't have the resources of big institutions to fight lengthy legal battles.
Interesting to see India simplifying its securities laws while many developed countries are complicating theirs. The 2-year cooling-off period is actually more generous than what we have in the US. But 360 days for investigation seems excessive - that's almost a year. Hope they have proper tracking mechanisms to prevent delays.
Here's my concern - they're consolidating three acts into one. While simplification is good, what about the specific provisions that were protecting minority shareholders? Hope the new code doesn't water down those protections in the name of simplicity. Also, SEBI's powers of inspection need clearer boundaries - preventing reopening after 8 years is welcome but what about cases of fraud that surface later? 🤔
As a chartered accountant, I've seen how complicated our securities laws are for businesses too. This code will definitely help in reducing compliance burden. The 180 to 360 days
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