Standing Committee on Finance Endorses Securities Markets Code 2025

The Standing Committee on Finance has broadly endorsed the Securities Markets Code, 2025, while calling for a more accountable regulatory framework for the Securities and Exchange Board of India (SEBI). The committee supports expanding SEBI's statutory responsibilities and operational authority regarding market supervision, investigation, and enforcement to increase investor protection.

To prevent the exercise of arbitrary power, the panel recommended tighter statutory guardrails. Specifically, the committee advised redrafting the Code to limit SEBI's ability to reopen investigations after the eight-year limitation period. The panel suggested such actions should only occur when there are "reasonable grounds to believe" there is systemic impact or serious market abuse.

While the committee endorsed SEBI's enhanced rule-making role, it stipulated that regulations must undergo public consultation and parliamentary scrutiny. These measures are intended to ensure transparency and preserve the regulator's credibility.