Securities Market Code 2025: New regulations formulated in light of Madhabi Puri Buch case

The central government on Thursday introduced the Securities Market Code Bill, 2025, marking a pivotal shift in the country's shift towards unified securities laws, merging and modernising several existing laws into a single, streamlined, principle-based framework. Once signed into law, the code is set to improve investor protection, enforcement and the ease of doing business in the domestic capital market.

The incoming securities market law combines three major laws governing Dalal Street activities: the SEBI Act, the Depositories Act and the Securities Contracts Regulation Act (SCRA).

Special regulations added to Securities Market Code after taking cognisance of Madhabi Puri Buch case

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In a significant development, the proposed law introduces a host of regulations especially put in place after taking cognisance of the case involving former SEBI chairperson Madhabi Puri Buch, who attracted intense scrutiny and criticism after now-shut US short-seller Hindenburg Research leveled serious charges against her, including professional misconduct, misuse of power, and conflict of interest.

While Buch denied the charges, many eminent financial experts raised serious questions about SEBI’s integrity after the case.

SEBI's current Chairman, TK Pandey, took charge on March 1, after Buch demitted office in late-February after serving a three-year term.

Key provisions introduced in light of Buch case

Among the key provisions introduced in light of the case, the proposed code requires SEBI officials to disclose any direct or indirect relationships and to recuse themselves from the case concerned.

SEBI officials must also inform the regulator's board about the nature of such direct or indirect connections

Additionally, the board will be required to record such disclosures formally in writing.

Securities Market Code Bill

Finance Minister Nirmala Sitharaman presented the Securities Market Code Bill in the lower house of Parliament on Thursday, referring it to a select committee for further discussion.

The Opposition criticised the Bill at the introduction stage, stating that it concentrates excessive power in a single body.

Responding to the Opposition's view, the finance minister referred to the just-introduced Bill to the panel that could deliberate such details.

Who is Madhabi Puri Buch?

Buch served as chairperson of SEBI from March 2022 to February 2025.

She was the first woman, the youngest person as well as the first private-sector professional to lead the country's capital market regulator.

The Buch case highlighted the need for stronger checks and balances to address concerns over the powers of senior SEBI officials and gaps in disclosure requirements.