Unlocking Innovation: The Securities Markets Code 2025 Sets the Stage for a Future-Ready Regulatory Framework.

The Securities Markets Code, 2025 aims to streamline the regulatory landscape governing India’s securities markets, which is crucial as the country aspires to emerge as one of the top five global markets. With the Code recently presented to Parliament and delegated to a committee for review, it is essential that the legislative framework not only meets current needs but anticipates future trends. A robust regulatory environment is vital for supporting the anticipated growth and governance of the capital markets, enhancing transaction execution through increased ease, speed, and simplicity.

Several innovative measures have been proposed to enhance the Code, particularly concerning market access and governance. Currently, the Code does not accommodate listing without an offering, which could enable companies to enter the capital markets without issuing new shares or selling existing ones. Additionally, the establishment of a trading platform for unlisted companies is crucial for facilitating liquidity and enabling price discovery beyond full listings. Implementing electronic voting mechanisms for shareholder meetings also warrants a review to ensure that the process is transparent and aligns with the principles of shareholder democracy.

Furthermore, the regulatory structure surrounding the Securities and Exchange Board of India (SEBI) needs to be reassessed. As SEBI has matured over its 38-year existence, it should be acknowledged as the sole regulatory authority for listed companies to streamline processes and eliminate delays associated with multiple regulatory interactions. By consolidating oversight under SEBI and assigning operational responsibilities to market infrastructure institutions, the Securities Markets Code can be designed to reflect a forward-looking vision for India’s capital markets, ready to accommodate their next phase of growth efficiently and effectively.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)