The Securities and Exchange Board of India (Procedure for Making, Amending, and Reviewing Regulations) Regulations, 2025 will come into force from the date they are published in the Official Gazette. The regulations serve as the foundation for SEBI’s regulatory framework, outlining the process by which SEBI creates, revises, and reviews the rules and guidelines governing India’s securities market.
Framing of Regulations
According to Chapter II, SEBI has the authority to make regulations that are necessary to carry out the purposes outlined in the Securities and Exchange Board of India Act, 1992 and other related acts like the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996, and the Companies Act, 2013. The regulations aim to enhance the governance and operation of the securities market.
Public Consultation Process
One of the most important aspects of the process is public consultation. Before implementing new regulations, SEBI must publish the proposal on its official website to solicit feedback from the public. This includes the proposed regulations, a statement of the regulatory intent, and the process for submitting comments. A minimum period of 21 calendar days is typically provided for stakeholders to submit their feedback. Afterward, SEBI is required to publish the rationale behind accepting or rejecting public comments.
Approval and Amendment of Regulations
Once public comments are received, the proposed regulations are submitted to SEBI’s Board for approval. The Board considers these proposals in detail before making a final decision. In cases of urgency, such as when swift action is needed for investor protection or market development, SEBI may bypass or shorten the public consultation period.
Amendments to existing regulations follow the same procedure as creating new ones. If there are any changes to the regulations, the Board will issue updated versions that must also be subject to public consultation unless it deems an expedited process necessary.
Review of Regulations
SEBI also periodically reviews its existing regulations. This review ensures that the regulations continue to serve their intended purpose, remain relevant in a changing market environment, and align with global best practices. The review process takes into account factors like experience gained from market surveillance and enforcement, relevant court rulings, and the need for regulatory updates in line with evolving market conditions.
Miscellaneous Provisions
The regulations also clarify certain exceptions and provide for non-applicability in specific cases. For example, internal organizational matters within SEBI, such as administrative procedures, are exempt from these regulations. Additionally, any previously approved regulations that have not yet been notified are not subject to the new regulations.
