The government has agreed to several significant changes in the proposed Securities Markets Code (SMC) following stakeholder consultations. According to reports from The Economic Times, the investigation timelines will be extended from 180 days to one year, addressing concerns about complex cases involving insider trading, market manipulation, and securities fraud that may require more time for proper investigation.
The stakeholder consultation process generated 1,055 comments, including 665 unique comments, as reported by The Economic Times. Of these, 62 suggestions were accepted, 584 did not find favour, while 19 were considered already addressed in the draft Bill. The changes were recommended by various stakeholders including Sebi and others during deliberations between the Parliamentary Standing Committee on Finance, headed by BJP MP Bhartruhari Mahtab.
In another investor-protection measure, the government has agreed to provide depositories with enabling powers to rectify records in cases involving fraud, forgery, coercion, or technical glitches, according to The Economic Times. The government has also agreed to broaden appellate remedies under the new law by making orders passed by Adjudicating Officers appealable before the Securities Appellate Tribunal, and has further agreed to prescribe an outer limit for condonation of delay in filing appeals before SAT.
On the issue of supersession of governing boards of Market Infrastructure Institutions (MIIs) and Self-Regulatory Organisations (SROs), the government clarified that the power would vest with the central government, though it would be exercised on Sebi's recommendation, as reported by The Economic Times. The Finance Ministry stated that the provision is based on powers already available under the section 11 of the Securities Contracts (Regulation) Act and has been extended to all MIIs under the proposed Code.
