SMC Bill Caps Sebi Probes at 8 Years, Mandates Time-Bound Enforcement & Ombudsperson

• The Securities Markets Code (SMC) Bill introduces an eight-year statutory limit on Sebi inspections and investigations, aiming to prevent prolonged regulatory uncertainty for market participants.
• The Bill mandates time-bound enforcement, requiring Sebi to complete investigations within 180 days and limiting interim orders to 180 days, extendable up to two years.
• It establishes an Ombudsperson-led grievance redressal mechanism to strengthen investor protection, requiring investors to first seek resolution from service providers before approaching the Ombudsperson.
• SMC Bill consolidates and replaces three existing securities laws: the Securities Contracts (Regulation) Act, 1956; the Sebi Act, 1992; and the Depositories Act, 1996.
• Sebi is now required to set aside 25% of its annual surplus into a Reserve Fund for expenses, with the remaining surplus transferred to the Consolidated Fund of India.

Why It Matters: SMC Bill brings legal certainty, time-bound enforcement, and enhanced investor protection to capital markets.