Finance Minister Nirmala Sitharaman has proposed merging three securities-related Acts under one umbrella legislation in her Budget proposals presented on February 1 in Parliament. Sitharaman said the government proposed to merge the Securities Contracts Regulation Act, Depositaries Act, and Securities Exchange Board of India Act into a new Securities Code Act.
Market experts feel these measures will help in faster amendments. Otherwise, the government has to amend these inter-related Acts separately. Currently, all three acts are regulated by SEBI.
Speaking to Moneycontrol, Arka Mookerjee, Partner, J Sagar Associates, said: “The securities market code is in line with previous discussions on the NFRA. It marks a step towards streamlining multiple laws, ordinances, guidelines and regulations. If drafted and executed in a proper manner, it will be helpful to market participants and remove any possible conflicts in the regulatory framework, and will provide clarity in policymaking to investors and stakeholders.”
Follow Moneycontrol's Union Budget 2021 live coverage here.
“The consolidation of securities laws, existing decriminalisation of offenses under the Companies Act, and the proposed decriminalisation under the LLP Act marks an important move towards making the Indian corporate legal framework, simpler, business-friendly, and ultimately (hopefully) reducing compliance costs,” Mookerjee added.
Divaspati Singh, Partner with Khaitan & Co, says this was a much-needed reform for securities regulation. “The proposed consolidation of the Sebi Act, Depositories Act, Government Securities act and the SCRA would be a welcome change, since this may reduce the ambiguities and gaps in these different legislations, which are interconnected and interdependent,” he explained.
Ajay Shaw, Partner, DSK Legal, added: “The Securities Market Code is intended to consolidate the primary legislation governing the securities market, i.e., the Securities Contract Regulation Act, 1956; SEBI Act, 1992; Depositories Act, 1996 and Government Securities Act, 2007 under one umbrella legislation. This is line with the Government’s endeavour to simplify prevalent legislative frameworks and unify multiple legislations for better interpretation, understanding, and implementation.”
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
