New Bill pushes for larger SEBI board, stricter conflict of interest safeguards, Pg13

Key Highlights:

• The Securities Markets Code (SMC), 2025 was tabled in Parliament by the Finance Minister on Thursday, replacing three existing laws.
• The Bill empowers SEBI to remove board members for non-compliance and enforces stricter conflict of interest disclosures.
• The SEBI Board will be increased to 15 members from the current 9, including members from the Central government and RBI.
• The Bill consolidates the Securities Contracts (Regulation) Act, 1956 (SCRA), the SEBI Act, 1992, and the Depositories Act, 1996.

Detailed Insights:

• The SMC aims to consolidate key regulations in the Indian securities market, potentially benefiting market practitioners.
• The Bill proposes the decriminalization of securities laws, categorizing violations into fraudulent practices and market abuse.
• SEBI can delegate registration functions to Market Infrastructure Institutions (MIIs) and Self-Regulatory Organizations (SROs) for effective regulation.
• An investor charter will be mandated to safeguard investor interests and encourage participation in securities markets.
• The code provides a framework for inter-regulatory coordination to improve the investment climate and promote market making.
• SEBI will establish an Investor Grievance Redressal Mechanism, directing service providers to create similar systems.

Key Concepts Involved:

• SEBI: Regulator of the securities market in India, protecting investor interests.
• Market Abuse: Grave violations affecting market integrity, attracting civil penalties.
• MIIs: Institutions like stock exchanges that facilitate trading and market operations.