Regulatory architecture 2.0: Securities Markets Code marks a decisive shift

Part two of a three-part series on the Securities Markets Code focuses on regulatory reform as it moves from discretion to institutional design

The Securities Markets Code, 2025 (SMC/ Code), introduced in the winter session of Parliament and at present under examination by the Standing Committee on Finance, marks a decisive shift to what may be described as regulatory architecture 2.0. It replaces the architecture 1.0 designed around the Securities and Exchange Board of India (Sebi) in the mid-1990s and subsequently replicated, with variations, across regulatory domains.  Unlike its predecessor, which focused largely on functional empowerment, the new architecture places regulatory governance at the centre. This piece examines three core levers that the code uses to make that shift: Board composition, independence,