Corporate and Economic Laws · SEBI Laws and Regulations

SEBI Regulation-Making Power and Application of Other Laws

Updated 11 October 2026 · Fact-checked

SEBI makes regulations under the powers its Act gives it, and every rule and regulation must be laid before Parliament for thirty days (Section 31, SEBI Act). Section 32 says the SEBI Act adds to other laws and does not replace them. To answer, state the rule, the laying process and the 'in addition' effect.

Understand SEBI Regulation-Making Power and Application of Other Laws

A statute lays down broad principles. The detailed working is left to subordinate legislation. Under the SEBI Act, 1992 this takes two forms: rules and regulations. Rules are made by the Central Government. Regulations are made by SEBI. Both are made under the Act and must stay within it.

Section 31 of the SEBI Act is the parliamentary control. Every rule and every regulation must be laid, as soon as may be after it is made, before each House of Parliament while it is in session. The laying period is a total of thirty days. It may fall in one session or in two or more successive sessions.

Parliament can then act. If, before the expiry of the session immediately following the session (or successive sessions) of laying, both Houses agree to modify the rule or regulation, it has effect only in the modified form. If both Houses agree it should not be made, it has no effect. Either way, anything already done under it stays valid. The modification or annulment is without prejudice to the validity of anything previously done.

Section 32 deals with overlap with other laws. The SEBI Act is in addition to, and not in derogation of, any other law for the time being in force. 'In derogation' means taking away from or weakening. So the SEBI Act does not override or cancel, for example, the Companies Act. A person may have to comply with both.

The same pattern appears in the other two securities statutes. Section 27 of the Depositories Act, 1996 is the same laying rule. Section 28 of that Act says it is in addition to other law relating to the holding and transfer of securities. In the Securities Contracts (Regulation) Act, 1956, Section 30 lets the Central Government make rules, and Section 31 lets SEBI make regulations by notification in the Official Gazette, consistent with the Act and its rules. Section 31(3) of that Act has the same thirty-day laying rule.

Key rules to remember

Laying before Parliament (Section 31, SEBI Act): Every rule and every regulation → laid before each House, while in session → total 30 days (one or more successive sessions); Applies to both rules and regulations. The 30 days can be split across successive sessions.
Parliament's power after laying: Both Houses agree to modify → effect only in modified form; both Houses agree it should not be made → no effect; Needs agreement of both Houses, before the expiry of the session immediately following. Past acts remain valid.
Application of other laws (Section 32, SEBI Act): SEBI Act = in addition to, and not in derogation of, any other law for the time being in force; The Act supplements other laws. It does not replace them.
Who makes what (SCRA, 1956): Rules: Central Government (Section 30). Regulations: SEBI, by notification in the Official Gazette (Section 31); SCRA regulations must be consistent with the Act and its rules.
Parallel provisions in the Depositories Act, 1996: Section 27 = laying before Parliament (30 days). Section 28 = in addition to other law on holding and transfer of securities; Section 28 is narrower in wording than Section 32 of the SEBI Act.

How to solve SEBI Regulation-Making Power and Application of Other Laws questions

Use this method for any question on SEBI's subordinate legislation or on Section 32.

1Identify the Act in the question: SEBI Act, SCRA or Depositories Act. The section numbers differ.
2Decide whether the question is about a rule (Central Government) or a regulation (SEBI), or both.
3For laying questions, state the 30-day period and that it may run over one session or successive sessions.
4State what both Houses may do: modify or annul. Stress that both Houses must agree, and that acts already done stay valid.
5For Section 32 questions, quote the phrase 'in addition to, and not in derogation of' and explain it in plain words.
6Apply it to the facts: if two laws apply, the person must comply with both unless a law itself says otherwise.
7Close with one line stating the conclusion, with the section number.

Quickest way: Four-line recall for Sections 31 and 32

When to use it: For MCQs and short-note questions where you have under two minutes.

Who: Central Government makes rules, SEBI makes regulations.
Control: laid before both Houses, 30 days, in one or more sessions.
Outcome: both Houses must agree to modify or annul, and past acts stay valid.
Section 32: Act is additional to other laws and does not replace them.

Common mistakes in SEBI Regulation-Making Power and Application of Other Laws

Saying only regulations are laid before Parliament.
Students link Parliament with rules and SEBI with regulations and forget the text covers both.
Fix: Remember the words 'every rule and every regulation'.
Writing the laying period as 30 days of one session.
The word 'session' suggests a single sitting block.
Fix: Write 'a total period of thirty days, which may be in one session or two or more successive sessions'.
Saying one House can annul a regulation.
Students assume a simple majority vote in either House is enough.
Fix: The text requires that both Houses agree to modify, or agree that it should not be made.
Saying annulment makes everything done under the regulation void.
Students read 'no effect' as retrospective.
Fix: Add that modification or annulment is without prejudice to the validity of anything previously done.
Reading Section 32 as the SEBI Act overriding the Companies Act.
SEBI is a strong regulator, so students assume its law prevails.
Fix: Section 32 says the Act is additional and not in derogation. It does not give priority over other laws.
Mixing up section numbers across the three Acts.
The laying text is almost identical in each Act.
Fix: Learn: SEBI Act 31 and 32, Depositories Act 27 and 28, SCRA 30 (rules) and 31 (regulations).

Worked examples

Example 1

SEBI notifies a regulation in the Official Gazette. Explain what must happen to it under Section 31 of the SEBI Act, 1992, and what Parliament can do.

Show the solution

Section 31 covers every rule and every regulation made under the Act, so this regulation is covered.
It must be laid, as soon as may be after it is made, before each House of Parliament while in session.
The laying period is a total of thirty days. It may be in one session or in two or more successive sessions.
If, before the expiry of the session immediately following, both Houses agree to modify it, it has effect only in the modified form.
If both Houses agree it should not be made, it is of no effect.
In either case, anything done under it earlier remains valid.

Answer: The regulation must be laid before both Houses for a total of 30 days. Both Houses together may modify or annul it, and acts already done under it stay valid.

Example 2

A listed company argues that because it complied with the SEBI Act, it need not comply with a separate applicable law on the same conduct. Examine using Section 32.

Show the solution

Section 32 says the SEBI Act is in addition to, and not in derogation of, any other law for the time being in force.
'Not in derogation' means the SEBI Act does not take away from or replace other laws.
So the other law continues to apply along with the SEBI Act.
Compliance with one does not excuse non-compliance with the other, unless that other law itself provides so.
Conclusion: the company's argument fails.

Answer: The argument fails. Under Section 32, the SEBI Act supplements other laws, so the company must comply with both.

Exam tips

Quote the key phrases exactly: 'every rule and every regulation', 'thirty days' and 'in addition to, and not in derogation of'.
In MCQs, watch for options that say 'either House' or 'one session only'. Both are wrong on the text.
Add the section number to every answer. Examiners reward precision.
For a rules versus regulations question, give the maker, the source of power and the Parliament control in three lines.
Do not invent case law for this topic. A clean statutory answer scores better.

Practice questions from SEBI Laws and Regulations

SEBI Regulation-Making Power and Application of Other Laws in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

SEBI Regulation-Making Power and Application of Other Laws: frequently asked questions

What does Section 31 of the SEBI Act say?

It requires every rule and every regulation made under the Act to be laid before each House of Parliament for a total of thirty days. Both Houses can then agree to modify it or to annul it. Anything done earlier under it stays valid.

What is the difference between SEBI rules and regulations?

Rules are made by the Central Government, as in Section 30 of the SCRA. Regulations are made by SEBI, as in Section 31 of the SCRA, by notification in the Official Gazette. Both are laid before Parliament for thirty days.

What does 'in addition to and not in derogation of' mean in Section 32?

It means the SEBI Act supplements other laws and does not weaken or replace them. A person or company may have to follow the SEBI Act and another law at the same time.

Does the same rule apply under the Depositories Act and SCRA?

Yes for laying before Parliament: Section 27 of the Depositories Act and Section 31(3) of the SCRA repeat the thirty-day rule. The Depositories Act's Section 28 says it is in addition to other law relating to holding and transfer of securities.