The Securities Exchange Board of India (“SEBI”), in exercise of powers conferred under Section 31 of the Securities Contracts (Regulation) Act, 1956 (“Securities Contracts Act”), Section 30 of the Securities and Exchange Board of India Act, 1992 and Section 25 of the Depositories Act, 1996 (“Depositaries Act”), vide Notification No. F. No. SEBI/LAD-NRO/GN/2025/229[1], dated February 13, 2025, issued SEBI (Procedure for Making, Amending and Reviewing of Regulations) Regulations, 2025 (“SEBI Regulations”).
The salient features of the Regulations are as follows:
- Framing of Regulations: The SEBI Regulations authorize the Board to make regulations for the implementation of Securities Contracts Act, the Depositories Act, the Companies Act, 2013, and other relevant enactments conferring powers and functions on SEBI. Additionally, regulations may be framed following the necessary processes to achieve the objectives of the governing laws.
- Public Consultation Process: SEBI shall be required to seek public comments prior to the finalization of regulations. This includes publishing of:
- the proposed changes to policies along with the draft regulations;
- the statutory provisions enabling the proposed regulations;
- a statement of regulatory intent and objectives;
- a timeline and process for receiving comments, wherein, a minimum period of 21 (twenty-one) days shall be provided for the public to submit comments; and
- the rationale for rejecting any public comments.
- Approval of Regulations: The Board shall review and approve the proposed regulations as per the Securities and Exchange Board of India (Procedure for Board Meetings) Regulations, 2001. In the event, there is any public consultation involved, the Board must receive a compilation or summary of public comments and the Department’s remarks.
- Exigency Provisions for Regulations: In cases of urgency, where public consultation might impede investor interests or market regulations, the SEBI Chairperson may dispense with or reduce the consultation period. However, the information regarding any dispensed consultation or shortened period shall be presented to the Board.
- Amendment and Review of Regulations: Amendments to existing regulations shall follow the same procedure outlined in the framing process, subject to specific provisions contained in Regulation 6 and Regulation 9 of the SEBI Regulations. Further, all regulations shall be periodically reviewed based on:
- their stated objectives;
- experience gained from enforcement and supervision;
- relevant court orders and global best practices;
- changes in the market environment and scope for ease of doing business.
- Non-Applicability of Certain Provisions: The SEBI Regulations shall not apply to:
- internal organizational matters of SEBI;
- regulations that are procedural or do not result in substantive policy changes;
- amendments to the regulations;
- proposals for which public comments have already been sought or received.
[1]https://www.sebi.gov.in/legal/regulations/feb-2025/securities-and-exchange-board-of-india-procedure-for-making-amending-and-reviewing-of-regulations-regulations-2025_91954.html