New Securities Code would let government supersede SEBI in certain cases

It establishes a unified legal framework for regulating the market, protecting investors, and defining the powers of the Securities and Exchange Board of India (SEBI).

Who it concerns: The law affects the Securities and Exchange Board of India (SEBI), market infrastructure institutions (such as stock exchanges and depositories), intermediaries (like stock brokers and investment advisors), issuers of securities, investors (including beneficial owners), and the Central Government.

What the bill does

• Establishes the composition, management, and powers of the Securities and Exchange Board of India (SEBI).
• Grants SEBI powers for inspection, investigation, search and seizure, and adjudication of contraventions.
• Mandates the registration of intermediaries, investment schemes, and market infrastructure institutions.
• Regulates contracts for the purchase or sale of securities, including derivatives and spot delivery contracts.
• Requires securities to be held in dematerialised and fungible form through depositories.
• Sets rules for the listing, delisting, and disclosure requirements for public issues.
• Establishes a Securities Appellate Tribunal for appeals against orders passed by SEBI or adjudicating officers.
• Prohibits fraudulent, unfair practices, and market abuse.
• Defines penalties and punishments for non-compliance with the Code, including failure to redress investor grievances.
• Provides for the establishment of Special Courts for trying offences under the Code.
• Creates an Investor Protection and Education Fund.
• Includes provisions for a regulatory sandbox and a National Institute of Securities Markets.

Also in the document

• The Bill includes a chapter for amendments to four other existing Acts (Act 12 of 1974, Act 15 of 2003, Act 17 of 2018, and Act 32 of 2023).
• It includes a clause for the repeal and saving of previous enactments.
• The Code specifies that penalties imposed are to be credited to the Consolidated Fund of India.
• It grants the Central Government the power to supersede the Board or market infrastructure institutions in certain circumstances.