Archive · 29 Dec 2025
New Market Code May Constrain Sebi Funding
The Indian government is working on a new law called the Securities Markets Code (SMC) to simplify rules for the stock market.
This new law might make it harder for the stock market regulator, Sebi, to get money for its work.
Currently, Sebi gets money from fees it charges to companies and people working in the stock market.
The new law suggests that 25% of Sebi's extra money each year should go into a special savings account.
The rest of the extra money will go to the government.
This could make it difficult for Sebi to expand and do its job well, especially since it plans to open new offices in different cities.
Some experts are also worried about how the new law will handle complaints from people who invest in the stock market.
The proposed Securities Markets Code (SMC) aims to unify three different laws and simplify norms for the Indian stock market.
Sebi's funding may be constrained as 25% of its annual surplus will go to a reserve fund, with the rest transferred to the Consolidated Fund of India.
Sebi plans to expand its reach by setting up regional offices in cities like Chandigarh, Lucknow, Jaipur, Hyderabad, and Bengaluru.
The new code prescribes strict timelines for investigations, which may require Sebi to invest more in technology and resources.
Experts have raised concerns about the potential burden on the Securities Appellate Tribunal (SAT) due to the new Ombudsperson framework.
- Who
- Securities and Exchange Board of India (Sebi), Government of India
- What
- Proposed Securities Markets Code (SMC) that may constrain Sebi's funding
- When
- During the revamp of India’s securities legislation
- Where
- India
- Why
- To unify three different laws into the SMC and address potential funding challenges for Sebi
- Proposed Reserve Fund
- 25% of Sebi's annual surplus, capped at the total expenditure of the preceding two financial years
- Sebi's Current Surplus
- Rs 3,000-4,000 crore
- Sebi's Expansion Plans
- Setting up regional offices in cities like Chandigarh, Lucknow, Jaipur, Hyderabad, and Bengaluru
- Ombudsperson Framework
- To be introduced in the principal legislation, with Sebi officers potentially acting as ombudspersons
- Sebi's Income Sources
- Fees levied on market intermediaries
- Consolidated Fund of India
- Receives the remaining surplus after the reserve fund allocation