Archive · 29 Jul 2026
Parliamentary Panel Strengthens SEBI's Enforcement Framework
The Parliamentary Standing Committee has suggested changes to the Securities Markets Code (SMC) to make the Securities and Exchange Board of India's (SEBI) enforcement framework stronger and more legally sound.
These changes include separating the investigation and adjudication processes, extending the investigation period to one year, and adding stronger safeguards for investors.
Legal experts say these changes will make SEBI's actions more consistent and reduce unnecessary legal battles.
However, some experts worry that deleting a provision allowing SEBI to define new criminal offences through regulations could leave gaps in enforcement.
Overall, the changes aim to make SEBI's enforcement actions more robust and legally sustainable.
The Parliamentary Standing Committee proposed changes to the Securities Markets Code (SMC) to strengthen SEBI's enforcement framework.
Key changes include functional separation of investigation and adjudication, extension of investigation period to one year, and stronger investor grievance mechanisms.
Legal experts believe the recommendations make SEBI's enforcement framework more structured and legally sustainable.
Deleting a provision allowing SEBI to define new criminal offences through regulations could leave enforcement gaps.
The recommendations require SEBI to rely on stronger documentation, procedural discipline, and clearly defined thresholds for enforcement powers.
- Who
- The Parliamentary Standing Committee
- What
- Proposed changes to the Securities Markets Code (SMC) to strengthen SEBI's enforcement framework
- When
- July 29, 2026
- Where
- India
- Why
- To make SEBI's enforcement framework more structured and legally sustainable by introducing stronger procedural safeguards while retaining broad enforcement powers.
Proponents of Stronger Safeguards
Concerns Over Enforcement Gaps
Functional Separation of Investigation and Adjudication
Proponents of Stronger Safeguards
Proponents argue that this separation improves decisional consistency and reduces avoidable litigation.
Concerns Over Enforcement Gaps
Critics worry that this could create enforcement gaps if new forms of market manipulation emerge.
Extension of Investigation Period
Proponents of Stronger Safeguards
Supporters believe extending the investigation period to one year makes investigations more practical and structured.
Concerns Over Enforcement Gaps
Opponents argue that this could lead to prolonged investigations and potential delays in enforcement.
- Proposed Changes
- Functional separation of investigation and adjudication, extension of investigation period to one year, stronger investor grievance mechanisms, tighter procedural safeguards around enforcement.
- Key Recommendations
- Deletion of provision allowing SEBI to define new criminal offences through regulations, stronger documentation, procedural discipline, clearly defined thresholds for enforcement powers.
- Potential Litigation Areas
- Clause 58(2) qualification allowing challenges in cases of fraud or technical glitches, SEBI's power to enhance and reduce Adjudicating Officer penalties under Clause 21.
- Expert Opinions
- Legal experts believe the recommendations make SEBI's enforcement framework more structured and legally sustainable while retaining broad enforcement powers.
- Date
- July 29, 2026