SEBI's High-Level Committee Proposes Framework On Conflict Of Interest, Disclosures

A high-level committee chaired by former Chief Vigilance Commissioner Pratyush Sinha submitted its report on conflict of interest and disclosures concerning SEBI officials to the market regulator on Monday.,

The development marks a critical move toward tightening internal governance and ethical standards at the Securities and Exchange Board of India. The report was formally presented to SEBI Chairperson Tuhin Kanta Pandey, the regulator confirmed in a statement.

The submission is the culmination of a review initiated by the SEBI board during its meeting on March 24. This decisive action was prompted by the need for a comprehensive assessment of existing provisions regarding conflict of interest and disclosures related to property, investments, and liabilities by SEBI members and officials.

The committee’s mandate focused on delivering a proactive framework designed to prevent, mitigate, and effectively manage conflicts of interest. Among the key recommendations detailed in the report is the urgent need for a tighter recusal policy to guide officials when dealing with matters where personal or familial interests may interfere with their duties.

The panel also proposed a strengthening of disclosure requirements, specifically advocating for provisions covering public disclosures and stricter restrictions on personal investments by SEBI members and officials.

To ensure accountability and transparency, the HLC also addressed the administrative side of governance. It was tasked with recommending a mechanism that allows members of the public to raise concerns pertaining to conflict of interest and non-disclosures, including outlining a clear process for examining such complaints.

Further, the report proposed the essential maintenance of digital records and a comprehensive framework for monitoring compliance to ensure these new standards are consistently upheld across the regulatory body. The committee comprised notable experts and former officials, lending significant weight to its recommendations.

Chaired by Pratyush Sinha, it included Injeti Srinivas as Vice Chairman, alongside members Uday Kotak, G Mahalingam, Sarit Jafa, and R Narayanaswamy. The SEBI board will now evaluate the recommendations before potentially implementing the new governance framework.

(With inputs from PTI)