The Parliamentary Standing Committee on Finance stated that SEBI needs enhanced powers to deal with any issues that may arise in the fast-growing Indian securities market. The rule-based approach is crucial for improving accountability in the regulatory body once the proposed Securities Markets Code 2025 is introduced, said BJP member of parliament and committee chairman Bhartruhari Mahtab. The committee has been discussing the proposed legislation, whose primary objective is to create a pro-investor market environment.

As observed by Mahtab, there has been very rapid growth of the economy in India; therefore, it becomes necessary for SEBI to get more powers in order to prevent crises. As per Mahtab, the bill targets a rule-based and less subjective decision-making process and will be instrumental in increasing accountability in SEBI. The bill was tabled in the Lok Sabha in December and referred to a committee. The committee received 1,055 recommendations and forwarded them to the government.

Mahtab said that since the enactment of the SEBI Act in 1992, the country's securities market has been continuously evolving and facing new challenges. More and more middle-class individuals are investing. A strong law is necessary to protect investors and make the system more investor-friendly. The government has introduced this bill with this in mind. It combines three existing acts.

The Securities Markets Code seeks to establish a principles-based legislative framework. It aims to reduce compliance burden and strengthen the regulatory regime. It will also support the growth of technology-driven securities markets. The bill proposes to strengthen SEBI's regulatory capacity. It will expand the board from nine to 15 members. Stricter conflict-of-interest norms have also been introduced to enhance transparency in decision-making.

The committee will continue its discussions with the Economic Affairs Secretary on Friday. Mahtab said the committee aims to finalize its report by next month, which will be presented to Parliament during the first week of the monsoon session. The committee recorded oral evidence from representatives of the Ministry of Law and Justice, including the Department of Legal Affairs and the Legislative Department. Representatives from the Department of Economic Affairs, Ministry of Finance, also presented their views before the committee.