What does the unified securities market code in the stock markets really mean?

In line with previous discussions on the subject, the Budget proposed to introduce a unified securities markets code. This is likely to make access to capital markets a lot simpler as well as help in cutting compliance costs. It will also create a single point for all financial market regulation and reduce the friction between various rules and regulatory bodies.

The FM has clarified that the plan is to consolidate the provisions of SEBI Act, Depositories Act, Securities Contracts Regulation Act as well as the Government Securities Act into a single Super Securities Markets Code. It is not clear whether there will also be a overarching super regulator. It is expected to engender ease of doing business in financial markets.

For starters, it will be the first move towards a simpler Indian corporate legal framework. It will also help to streamline multiple laws, ordinances, guidelines and regulations. Over time, it is also likely to create a robust secondary debt market and encourage foreign capital allocations into India.

Overall, it is likely to improve the capital market ecosystem in India. In addition, it will also overhaul the SCRA and align with bigger role of SEBI, which now regulates commodities trading too.