Legislative Consolidation And Regulatory Discretion In Indian Securities Law: A Study Of The Proposed Securities Markets Code
- IJLLR Journal
- 17 minutes ago
- 2 min read
Tushar Gupta, Bharati Vidyapeeth Institute of Management and Research (BVIMR)
Himanshi Ahuja, Delhi Metropolitan Education, GGSIPU
ABSTRACT
India’s proposed Securities Markets Code represents a landmark shift from the present fragmented and statute-specific regulatory framework to a unified and principle-based architecture for the securities markets. The draft legislation, by consolidating the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, and the Depositories Act, 1996 into a single code, intends to increase the coherence of the regulatory framework, provide regulatory certainty, and simplify compliance in a fast-evolving, technology-driven capital market. However, such consolidation also gives rise to significant constitutional and administrative- law issues centering on the concentration of regulatory power in the Securities and Exchange Board of India (SEBI), the extent of delegated rule- making, and the sufficiency of procedural safeguards and mechanisms of accountability.
This article reviews in depth the trajectory of securities regulation in India and the positioning of the Securities Markets Code as part of the overall reform agenda inspired by the Financial Sector Legislative Reforms Commission and the international experiences of the United Kingdom and the United States. It examines the proposed structural transformation under the Code, under which rule-making powers are consolidated, market infrastructure institutions are redefined, SEBI’s enforcement and adjudicatory functions are expanded, and there is a shift towards the decriminalization of minor regulatory contraventions, and assesses whether these changes genuinely advance investor protection and market efficiency.
Drawing on constitutional principles, administrative-law doctrine and comparative regulatory models, the article argues that codification is normatively desirable for a mature securities market, but that its success depends on integrating strong procedural discipline, providing meaningful appellate review, and embedding institutional checks on regulatory discretion.6 The core claim is that the Securities Markets Code presents a significant opportunity for principled reform, but only if it is enacted and implemented as part of a broader framework of accountability rather than as a purely administrative consolidation exercise
