New Delhi

The Parliamentary Standing Committee on Finance has underscored the need to strengthen the powers of the Securities and Exchange Board of India (SEBI) to help it anticipate and address emerging challenges in the country's rapidly evolving securities market.

Speaking after a day-long meeting of the committee on Thursday, its chairman and BJP MP Bhartruhari Mahtab said that as India's economy expands at a fast pace, the market regulator must be adequately empowered to prevent potential crises before they arise.

He noted that the committee is also examining the role of tribunals and other institutional mechanisms within the regulatory framework. According to him, the proposed Securities Market Code, 2025 aims to create a more accountable and transparent regulatory structure by reducing subjectivity in decision-making and promoting a rules-based system.

Mahtab said the legislation was introduced in the Lok Sabha in December last year and subsequently referred to the parliamentary committee for detailed scrutiny. Since then, the panel has conducted extensive consultations and received 1,055 suggestions from stakeholders, which were forwarded to the government for its response.

Highlighting the transformation of India's securities market since the establishment of SEBI in 1992, he said the sector continues to evolve and faces new challenges, particularly with increasing participation from middle-class investors. He stressed the importance of a strong legal framework that protects investors while making the market more accessible and efficient.

The committee chief also said that the Legislative Department had proposed certain changes to the draft legislation. Efforts are underway to simplify the proposed law and make it easier for the public to understand.

The panel is scheduled to continue its deliberations with the Secretary of the Department of Economic Affairs on Friday. Mahtab expressed confidence that the committee's report would be finalised next month and presented in Parliament during the opening week of the Monsoon Session.

Earlier in the day, the committee heard evidence from officials of the Ministry of Law and Justice, including representatives from the Department of Legal Affairs and the Legislative Department. In a later session, officials from the Ministry of Finance's Department of Economic Affairs participated in a clause-by-clause review of the proposed legislation.

The Securities Market Code seeks to consolidate and modernise the legal framework governing securities markets. It aims to reduce compliance burdens, improve regulatory oversight, support technology-driven market development and enhance ease of doing business.

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Among its key proposals, the Bill seeks to expand SEBI's board strength from nine members to a maximum of fifteen. It also introduces stricter conflict-of-interest provisions, requiring board members to disclose any direct or indirect interests and recuse themselves from decisions where such conflicts exist. The legislation further calls for a more transparent and consultative process in framing subordinate regulations.