Context: A Single Security Market Code, consolidating the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 is being set up by the Government.

• Government has announced the setting up of a Single Security Market Code.
• Coverage: It will consolidate the provisions of SEBI Act,1992, Depositories Act, 1996, Securities Contracts (Regulation) Act,1956, and Government Securities Act,2007.

Impact: This move will improve the ease of doing business in the country’s financial markets. Moreover, it will cut down compliances cost and do away with friction between various stakeholders.
Benefits of this Unified Code

• Improve ease of doing business in the country’s financial markets.
• Cut down compliances.
• Reduce cost and do away with friction between various stakeholders.

Other recommendations to be incorporated in the Unified Code

• A Permanent Institutional Framework will be set up

Purposes

• For instilling confidence among participants in the corporate bond market during times of stress
• To generally enhance secondary market liquidity

Functions

• Purchase investment-grade debt securities both in stressed and normal times
• help in the development of the bond market.

Challenges

• Modus Operandi is yet not revealed

Benefits

• It will deepen the bond market.
• It will help build positive sentiments for debt mutual funds particularly credit funds 
• These securities saw an excess outflow last year because of poor liquidity in few corporate papers.
• It will reduce the volatility in secondary market yields of relatively lower-rated bonds in the AA and A category.

A system of regulated Gold Exchanges

• For setting up a commodity market ecosystem with arrangements including vaulting, assaying and logistics in addition to warehousing:
• SEBI will be notified as the regulator and the Warehousing Development and Regulatory Authority will be strengthened.
• Investor Charter: It will define the Investor’s rights for all financial products and provide them with protection.
• Introduction of certain dispute resolution mechanisms 
• Reduction of the limitation period to 3 years should help in bringing certainty to taxpayers.

About Securities and Exchange Board of India (SEBI)

• Established in 1992
• Set up as per provisions of the SEBI Act, 1992 (Statutory Regulatory Body).

Functions

• To regulate the Indian capital markets.
• monitors and regulates the securities market 
• protects the interests of the investors by enforcing certain rules and regulations

Capital Market

• A capital market is an organized market in which both individuals and business entities buy and sell debt and equity securities. 
• Examples of highly organized capital markets are the National Stock Exchange (NSE), American Stock Exchange, London Stock Exchange.
• Capital markets help channelise surplus funds from savers to institutions which then invest them into productive use. 
• Generally, this market trades mostly in long-term securities.

The capital market consists of 

• Primary market: deals with trade of new issues of stocks and other securities
• Secondary market: deals with the exchange of existing or previously-issued securities.
• Another important division in the capital market is made on the basis of the nature of security traded, i.e. stock market and bond market.