Sebi clears conflict of interest & disclosure framework for top officials

Mumbai: The board of Securities and Exchange Board of India (Sebi) on Monday approved key recommendations of a high-level committee to strengthen conflict-of-interest norms, including mandatory public disclosure of assets and liabilities by its chairman and senior officials.

The panel, chaired by Pratyush Sinha, proposed that the chairman and Whole Time Members (WTMs) be brought under the definition of “insider”, and adhere to stricter disclosure and trading norms. All board members and employees will be required to make initial, annual, event-based and exit disclosures covering assets, liabilities, trading activities, family relationships and other interests.

Sebi said immovable property details of the chairman, WTMs and senior officials will be publicly disclosed, in line with norms for government service officers, while detailed asset declarations will also be submitted internally. However, part-time members are exempt from these requirements due to their limited role.

The board also approved creation of a digital system to manage conflict-of-interest disclosures, alongside a whistleblower mechanism and training programmes to promote ethical conduct. A formal recusal framework will be introduced to record and process cases involving potential conflicts.

In addition, uniform restrictions on investments and trading in equity and related instruments will apply to the chairman and WTMs, similar to existing rules for employees.

Officials must choose from options such as liquidating, freezing, or selling investments under a pre-approved plan upon assuming office.

The committee recommended that investments in equity, including unlisted entities, be either liquidated or frozen during tenure.

Officials must also disclose any negotiations for future employment.

Some recommendations will be referred to the central government, including proposals for separate regulations governing board members’ conflicts.

The approved measures will be incorporated into Sebi’s existing code and service regulations.

The review was initiated in 2025 following conflict-of-interest allegations involving former Sebi chairperson Madhabi Puri Buch, which were denied by all parties

concerned.