Budget 2021: Bye, bye multiple laws, hello 1 market code

NEW DELHI: The finance minister on Monday proposed consolidating important securities laws into a code, a move that has the potential to combine several legislations into a unified one. It could eliminate duplication, enhance clarity relating to these laws and bring down the cost of compliance, securities laws experts said.
On Monday, the FM proposed to consolidate the provisions of Sebi Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalised single securities markets code.
According to Sandeep Parekh, managing partner, Finsec Law Advisors, the idea of a unified securities market law has been mooted many times in the past but is being implemented now. “It will present a cohesive rubric of law as opposed to the piecemeal approach we have had till now.” The move relating to securities laws, when considered in a larger perspective, seems aimed at the government’s ‘Ease of Doing Business’ objective.
“The consolidation of securities laws, existing decriminalisation of offences under the Companies Act and the proposed decriminalisation under the LLP Act marks an important move towards making Indian corporate legal framework simpler, business-friendly and ultimately (hopefully) reducing compliance costs,” said Arka Mookerjee, Partner, J Sagar Associates.
The proposed securities market code is in line with previous discussions on the NFRA (National Financial Reporting Authority), an independent regulator to oversee the auditing profession and accounting standards in India.
“If drafted and executed in a proper manner, it will be helpful to market participants and remove any possible conflicts,” Mookerjee said.