In a significant move to overhaul India's financial regulatory landscape, the Union government has introduced a new, consolidated law aimed at simplifying the rules governing the securities market. The proposed legislation seeks to replace three existing, decades-old acts with a single, modern framework.
A Historic Legislative Consolidation
Finance Minister Nirmala Sitharaman tabled the Securities Markets Code, 2025, in the Lok Sabha on Thursday, December 18, 2025. The bill marks a pivotal step towards legal simplification in the country's capital markets. Its primary objective is to repeal and replace three separate acts that have governed different aspects of the market for years.
The three acts slated for repeal are:
- The Securities and Exchange Board of India (SEBI) Act, 1992
- The Depositories Act, 1996
- The Securities Contracts (Regulation) Act, 1956 (SCRA)
By merging these into one code, the government aims to eliminate overlaps, reduce complexity, and create a unified legislative structure for all securities market activities.
Objectives of the New Code
The Securities Markets Code, 2025, is not merely a consolidation exercise. It is designed to establish a modern regulatory framework that addresses the needs of a rapidly expanding economy. According to the bill's statement of objects and reasons, the new law will prioritize two key goals.
First, it seeks to enhance investor protection mechanisms, making them more robust and responsive to contemporary challenges. Second, it aims to facilitate capital mobilisation at a scale that matches the requirements of the fast-growing Indian economy. This indicates a clear intent to make Indian markets more efficient, transparent, and attractive for both domestic and global investors.
Next Steps: Parliamentary Scrutiny
Following its introduction, Finance Minister Sitharaman proposed that the bill be referred to the Parliamentary Standing Committee on Finance for a detailed review. This committee, comprising members from both houses of Parliament, will examine the provisions of the code, potentially hold consultations with stakeholders, and suggest amendments before it is taken up for discussion and passage in Parliament.
This step underscores the legislative importance of the bill and ensures thorough scrutiny by lawmakers. The move to table this code represents one of the most substantial proposed reforms to India's securities market legal architecture in decades, aiming to future-proof the regulatory environment.
