Key facts
- The government has agreed to extend securities market investigation timelines from 180 days to one year.
- Depositories will be empowered to rectify records in cases of fraud, forgery, coercion, or technical glitches.
- The central government's power to supersede market infrastructure institution boards will be exercised upon the recommendation of Sebi.
- Orders from Adjudicating Officers will be appealable before the Securities Appellate Tribunal.
- An outer limit for the condonation of delay in filing appeals before the Securities Appellate Tribunal will be prescribed.
The Indian government has indicated its agreement to several significant amendments in the draft Securities Markets Code (SMC). These changes, recommended by stakeholders including Sebi, aim to strengthen investor protection and streamline regulatory processes.
Key modifications include extending the investigation timeline for securities market probes from the initially proposed 180 days to a full year, a move supported by stakeholders who argued that complex cases like insider trading and market manipulation require more time. The government has also agreed to empower depositories to rectify records in instances of fraud, forgery, coercion, or technical glitches, enhancing investor recourse.
Furthermore, the appellate remedies under the new law will be broadened, making orders from Adjudicating Officers appealable before the Securities Appellate Tribunal (SAT). An outer limit for condoning delays in filing appeals with SAT will also be prescribed. Regarding the supersession of governing boards of Market Infrastructure Institutions (MIIs) and Self-Regulatory Organisations (SROs), the government clarified that this power rests with the central government but will be exercised based on Sebi's recommendation.
These proposed changes emerged from deliberations between the Parliamentary Standing Committee on Finance and the Department of Economic Affairs, following extensive stakeholder consultations that generated over 1,000 comments. The committee is expected to submit its report to the Lok Sabha Speaker before the upcoming Monsoon Session.