๐๐ฒ๐ฎ๐ฟ๐ ๐ผ๐ณ ๐ข๐๐ฒ๐ฟ๐น๐ฎ๐ฝ ๐ ๐ถ๐๐ฝ๐น๐ฎ๐ฐ๐ฒ๐ฑ? ๐ฅ๐ฒ๐๐ต๐ถ๐ป๐ธ๐ถ๐ป๐ด ๐๐ต๐ฒ ๐ฆ๐ ๐ – ๐๐๐ ๐๐ป๐๐ฒ๐ฟ๐ณ๐ฎ๐ฐ๐ฒ ๐ณ๐ผ๐ฟ ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ฎ๐น ๐ฆ๐ฒ๐ฟ๐๐ถ๐ฐ๐ฒ ๐ฃ๐ฟ๐ผ๐๐ถ๐ฑ๐ฒ๐ฟ๐
Financial Express (India) features an article titled “๐๐ฆ๐ข๐ณ๐ด ๐ฐ๐ง ๐๐ท๐ฆ๐ณ๐ญ๐ข๐ฑ ๐๐ช๐ด๐ฑ๐ญ๐ข๐ค๐ฆ๐ฅ”, authored by Dr. M. S. Sahoo and Mr. Sumit Agrawal.
The article examines concerns surrounding the interface between the proposed Securities Markets Code, 2025 (SMC) and the Insolvency and Bankruptcy Code, 2016 (IBC). It argues that apprehensions regarding conflicts between the two legislations are largely misplaced.
The authors explain that the SMC and the IBC perform distinct yet complementary functions. While the SMC seeks to preserve the stability and continuity of securities markets through provisions on settlement finality, close-out netting, and collateral enforcement, the IBC provides the institutional and procedural framework for insolvency resolution. Much of what the SMC protects, such as client assets and settlement arrangements, already lies outside the insolvency estate under the IBC.
The article further notes that the SMC does not create a standalone insolvency regime for financial service providers. Instead, Section 227 of the IBC enables the Central Government to extend the insolvency framework to specified categories of financial service providers with appropriate modifications, recognising their specialised functions.
The authors also argue that not all financial service providers should be subject to the same resolution framework. While systemically important institutions may require specialised resolution mechanisms, many others can continue to be resolved under the IBC with suitable modifications.
The article concludes that the real policy issue is not an overlap between the SMC and the IBC, but the absence of a comprehensive resolution framework for financial service providers. The SMC has merely exposed this gap; it has not created it.
The full article can be accessed at: https://lnkd.in/d92-ypii
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