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India is gearing up for its biggest clean-up of securities laws in decades. The proposed Securities Markets Code (SMC) 2025 aims to fold three separate laws into one single framework, a move the government believes is necessary as markets become bigger, faster and more technology-driven.

At present, India’s capital markets are governed by the SEBI Act, the Securities Contracts (Regulation) Act and the Depositories Act — laws written between the 1950s and 1990s. Over the years, amendments have piled up, overlaps have crept in and compliance has become more complex than intended. The SMC is meant to change that by bringing everything under one modern, principle-based code.

The most visible change is simplification. Instead of navigating multiple Acts and layers of regulations, market participants will deal with a single, consolidated law. Several outdated provisions have been removed, and procedures have been rewritten to better match how markets operate today.

Another major shift is how rules will be made. The Code makes public consultation compulsory. SEBI, stock exchanges, clearing corporations, depositories and even the central government will be required to seek feedback before issuing regulations, bye-laws or binding instructions. Criminal liability will be limited to serious market abuse, wilful defiance of SEBI orders and non-cooperation during investigations. Everything else moves into the civil penalty framework. The idea is to reduce fear-driven compliance while keeping enforcement tough where it matters.

The regulator’s Board will expand from nine members to as many as 15, allowing more domain experts and broader representation. Conflict-of-interest rules have also been tightened. Board members will be required to disclose even indirect interests, including those linked to family members, and step aside from decisions where conflicts arise. Transparency is another focus. This is aimed at strengthening public trust at a time when regulatory credibility is increasingly under scrutiny. While some offences are decriminalised, SEBI’s civil enforcement powers are sharpened.

This will clearly spell out investor rights, service standards and responsibilities across the market ecosystem. The grievance redressal system also gets an upgrade. The Code provides for a SEBI-led, time-bound mechanism, including the appointment of an Ombudsperson to handle complaints against intermediaries and issuers. This is meant to cut delays and bring accountability closer to the ground.

Stock exchanges, clearing corporations and depositories are brought under one unified legal framework, with standardised bye-laws. SEBI will also be allowed to delegate certain regulatory functions to market infrastructure institutions and self-regulatory organisations, subject to safeguards. The intent is to make regulation more responsive and closer to market realities.

The SMC 2025 is not just another amendment exercise. It is the first full rewrite of India’s securities law framework in decades. By replacing multiple, overlapping Acts with a single modern Code, it seeks to make markets easier to navigate, tougher on serious misconduct and fairer for investors. If implemented well, the Code could play a key role in supporting capital mobilisation in a fast-growing economy — while strengthening trust in India’s financial system.