Archive · 23 Dec 2025
Sebi's Powers Capped by SMC Bill
The Securities Markets Code (SMC) Bill has been introduced to limit the powers of Sebi, the organization that oversees India's stock market.
The Bill sets an eight-year limit on inspections and investigations, except for cases that have a big impact on the market.
It also requires Sebi to complete investigations within 180 days and introduces an Ombudsperson to help with complaints.
The Bill also requires Sebi to save 25% of its extra money for expenses.
Some people think this will make things clearer and faster, while others worry it might make Sebi's job harder and less thorough.
The SMC Bill imposes an eight-year statutory limit on Sebi's inspections and investigations, except for cases with systemic impact.
Sebi must complete investigations within 180 days under the new time-bound enforcement framework.
The Bill introduces an Ombudsperson-led grievance redressal mechanism to strengthen investor protection.
Sebi is required to set aside 25% of its annual surplus in a Reserve Fund for expenses.
The remaining surplus will be transferred to the Consolidated Fund of India.
- Who
- Securities and Exchange Board of India (Sebi)
- What
- Introduction of the Securities Markets Code (SMC) Bill
- When
- Introduced in the Lok Sabha last week
- Where
- India
- Why
- To provide legal certainty, prevent prolonged regulatory overhang, and strengthen investor protection
Supporters of the SMC Bill
Critics of the SMC Bill
Statutory Limit on Investigations
Supporters of the SMC Bill
The eight-year limit provides legal certainty and finality to past transactions, preventing prolonged regulatory overhang.
Critics of the SMC Bill
The time limit could hamper Sebi's ability to investigate complex cases thoroughly, potentially letting some violators off the hook.
Time-Bound Enforcement Framework
Supporters of the SMC Bill
The 180-day deadline for investigations ensures timely resolution and strengthens investor protection through an Ombudsperson-led grievance mechanism.
Critics of the SMC Bill
The tight deadline may pressure Sebi to rush investigations, potentially compromising the quality and thoroughness of their work.
Resource Allocation
Supporters of the SMC Bill
The Reserve Fund requirement ensures financial stability and investor protection, while the Ombudsperson mechanism enhances grievance redressal.
Critics of the SMC Bill
The additional manpower demands and capacity-building requirements may strain Sebi's resources and operational efficiency.
- Statutory Limit on Investigations
- 8 years
- Exemption from Limit
- Cases with systemic impact
- Investigation Completion Deadline
- 180 days
- Reserve Fund Requirement
- 25% of annual surplus
- Remaining Surplus Transfer
- Consolidated Fund of India
- Ombudsperson Mechanism
- Introduced for grievance redressal
