New Delhi, Dec 18 (UNI) In a major step towards modernising India’s financial architecture, the government on Thursday introduced the Securities Markets Code Bill, 2025 in the Lok Sabha, proposing a single, unified law to govern the country’s capital markets.
The Bill marks one of the most significant overhauls of securities legislation in decades and aims to replace a fragmented legal framework with a consolidated and contemporary code.
The proposed legislation seeks to repeal and merge three cornerstone laws that currently regulate the securities ecosystem — the SEBI Act, 1992; the Depositories Act, 1996; and the Securities Contracts (Regulation) Act, 1956.
By bringing these statutes under one umbrella, the government intends to simplify regulation, remove overlaps, and align market laws with the realities of modern, technology-driven financial markets.
At present, different aspects of India’s securities markets are governed by separate laws, often leading to regulatory duplication, interpretational challenges, and compliance complexity for market participants. The new Securities Markets Code is designed to address these issues by creating a single legal framework covering exchanges, intermediaries, depositories, issuers, and investors.
Officials familiar with the Bill say the consolidation will help regulators respond faster to market developments, reduce legal ambiguity, and ensure consistent enforcement across the ecosystem. The move is also expected to make India’s capital market regulations easier to understand for global investors, improving the country’s attractiveness as an investment destination.
A central objective of the Bill is to strengthen investor protection while simultaneously improving ease of doing business. The unified code adopts a more principle-based approach, allowing regulators to frame detailed rules without frequent legislative amendments. This is seen as critical in an era of rapid innovation, digital trading platforms, and evolving financial products.
The Bill also aims to streamline grievance redressal mechanisms and enforcement processes. Clearer definitions, uniform procedures, and the removal of outdated provisions are expected to reduce disputes and improve regulatory certainty. For intermediaries such as brokers, exchanges, and depositories, this could translate into lower compliance costs and fewer procedural hurdles.
Under the proposed framework, the Securities and Exchange Board of India (SEBI) will continue as the primary regulator of capital markets, but with its powers and responsibilities embedded within a consolidated legal structure. The government maintains that this will not dilute regulatory oversight, but instead provide a stronger and more coherent statutory foundation for supervision and enforcement.
Stock exchanges, clearing corporations, and depositories are expected to benefit from clearer statutory recognition and harmonised governance norms. Market participants believe that a single code could reduce uncertainty in regulatory interpretation and help institutions plan long-term investments with greater confidence.
Soon after its introduction, the government proposed referring the Bill to a Parliamentary Standing Committee for detailed examination. This move comes amid concerns raised by some opposition members about the concentration of regulatory powers and the extent of delegated authority under the new code.
The committee review is expected to examine issues such as checks and balances, regulatory accountability, and safeguards against excessive centralisation of power. Industry stakeholders, legal experts, and investor groups are also likely to be consulted during this process.
The Securities Markets Code Bill is not a sudden policy shift but the culmination of years of discussions on rationalising financial sector laws. The idea of consolidating securities legislation has been under consideration since earlier budget announcements, reflecting the government’s broader push to modernise economic laws and improve India’s business environment.
