New market code may constrain Sebi funding; ombudsman plan needs clarity

Greater clarity is also needed on the proposed Ombudsperson to resolve investor complaints, experts feel

As the government moves to revamp India’s securities legislation, unifying three different laws into the Securities Markets Code (SMC), regulatory experts and ma­rket insiders have raised conc­erns on potential funding challe­nges for the stock market regulator. 

While the new code simplifies several norms and sets timelines for investigations by the market regul­ator, it proposes the constitution of a reserve fund for the expenditure incurred by the Securities and Exchange Board of India (Sebi) and the transfer of the residual corpus to the Consolidated Fund of India. 

“Twenty-five per cent of the annual surplus of the General Fund in any financial