SEBI Board To Consider Panel Report On Disclosures, Conflict Of Interest On Dec 17: Tuhin Kanta Pandey

The Securities And Exchange Board of India (SEBI) will examine the report of a high-level panel, which recommended public disclosure of assets belonging to senior officers so as to avoid conflict of interest, Chairman Tuhin Kanta Pandey stated on Friday.

The board will take up the report on Dec. 17, in a meeting.

A SEBI panel in its report has recommended comprehensive reforms to usher in transparency via greater disclosure and a "zero-tolerance" culture to handle conflict of interest of top officials of the capital market regulator.

The high-level panel submitted its report to Chairman Pandey on Nov. 10.

The report has also proposed establishing a secure and anonymous whistleblower system to report conflict of interest, a ban on expensive gifts, a two-year restriction on post-retirement assignments, and creating a post of Chief Ethics and Compliance Officer.

The Committee on Conflict of Interest, Disclosures and Related Matters said the SEBI Chairman, whole-time members, and chief general manager-rank officers should make public disclosure of their assets and liabilities.

It also said those applying for the post of chairman and members, and for experienced entry positions, must disclose "actual, potential, and perceived conflict-of-interest risks of financial and non-financial nature" to the appointing authority.

"The board will take a final call on the recommendations made in the report," Pandey told reporters after inaugurating the SEBI pavilion at the India International Trade Fair here.

The panel has also given an elaborate classification of conflict of interest, which could be in the nature of financial, relational, professional, duty-related, or perceived.

"Adoption of these reforms will align SEBI with international best practices, strengthen its reputation, and reinforce its independence and integrity as India's capital market regulation," the committee said in its 98-page report.

It has also suggested that all SEBI board members and employees should make initial, annual, event-based and exit disclosures of assets, liabilities, trading activities and family relationships as well as other professional and relational interests.

The disclosure is to be made to the proposed SEBI's Office of Ethics and Compliance and the Oversight Committee on Ethics and Compliance.

Also, it recommended "induction and refresher training that stresses ethical conduct and fostering a zero-tolerance culture for conflict of interest."

In March, the SEBI board had decided to constitute the committee to undertake a comprehensive review of the existing provisions related to conflict of interest and disclosures of property, investments, liabilities, and other related matters by SEBI members and officials.

The committee's mandate included reviewing current policies and frameworks governing conflict of interest and identifying any gaps or ambiguities, and suggesting a mechanism for members of the public to raise concerns pertaining to conflict of interest and disclosures, including a process to examine complaints.

The high-level committee comprised former Chief Vigilance Commissioner Pratyush Sinha as Chairman, Injeti Srinivas as Vice Chairman, Uday Kotak, G Mahalingam, Sarit Jafa, and R Narayanaswamy as members.

(With PTI Inputs)