Securities and Exchange Board of India gains enhanced penalty review power before SAT

The Securities Markets Code Bill, 2025, includes Clause 21, which expands the authority of the Securities and Exchange Board of India. Previously, the Board could only revise the amount of a monetary penalty, but the new clause allows it to call for the record of any order passed by its Adjudicating Officer within 30 days. If the Board determines the order is not in the interest of the securities markets, it may enhance the penalty or severity of any direction, though it lacks the power to reduce the order.

This change introduces an asymmetrical revisionary mechanism, as noted by the Standing Committee on Finance. The power allows the Securities and Exchange Board of India to enhance penalties in orders reviewed by the Securities Appellate Tribunal, potentially increasing the severity of regulatory enforcement actions in India’s securities markets.

Regulatory bodies and stock exchanges in India are involved in legal disputes and appeals before the Supreme Court, as part of a broader effort by regulatory bodies to introduce appellate stages for settlement proceedings.