Budget 2021: Government proposes single securities market code

Experts say introduction of a unified securities markets code will help cut down compliance costs and reduce the friction between rules enacted by capital markets watchdog SEBI, depositories, and the government.

The government on Monday proposed introducing a unified securities markets code, a move that will help in boosting the ease of doing business in the country's financial markets.

The proposed move would help in cutting down compliance costs and reducing the friction between rules enacted by capital markets watchdog SEBI, depositories, and the government, experts said.

Finance Minister Nirmala Sitharaman in her Budget speech for 2021-22 proposed to consolidate the provisions of SEBI Act, Depositories Act, Securities Contracts (Regulation) Act, and Government Securities Act into a rationalised single securities markets code.

Towards investor protection, the minister also proposed to introduce an investor charter as a right for all investors in all financial products.

Lav Chaturvedi , ED and CEO of Reliance Securities, said the single securities market code will bring ease of doing business in Indian financial markets.

Divam Sharma, Co-Founder of Green Portfolio, believes that the securities market code is a welcome step towards a simpler Indian corporate legal framework and reducing compliance costs.

"It marks a step towards a single financial regulator and streamlining multiple laws, ordinances, guidelines and regulations," he added.

According to him, bringing Government Securities Act under the securities market code will also increase the credibility of the government's borrowings and thrust of foreign capital with the government looking to step up its borrowing for funding allocations announced in the budget.

"The proposal to create a unified securities market code is very progressive as it aims to simplify and reduce the friction between rules enacted by various acts of SEBI, depositories, G-Secs," said Tejas Khoday, Co-Founder and CEO of FYERS.

The initiative to introduce a unified code is a sign of great things to come. It shows that the government and SEBI are committed to improving the capital market ecosystem by strengthening the laws, he added.

Shagoofa Rashid Khan, Partner and Head, Funds, Investment and Advisory, Cyril Amarchand Mangaldas, said the securities market code is a welcome step forward especially since it will lead to overhauling of securities contract regulation act as well as lead to aligning of these laws to the expanded role of SEBI across securities and commodities markets.

"Together with the Investor Charter, the objective appears to be making the framework contemporary as well as bring transparency and consistency leading to improved investor confidence in Indian securities and commodities markets," Shagoofa said.

Edited by Teja Lele Desai


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