The board of the Securities and Exchange Board of India (SEBI) on Monday approved a revised code of conduct to manage conflicts of interest for its Whole-Time Members (WTMs) and officials. The new framework aims to introduce stricter disclosure requirements, greater transparency, and technology-based monitoring of conflict of interest situations. It also includes periodic disclosure of financial and non-financial interests, stronger recusal rules, and better institutional oversight.
SEBI said that proposals related specifically to board members, including separate regulations for disclosures and conflict management, will need government approval. Since the Central Government appoints SEBI board members and decides their service terms, it will take the final decision on these proposals.
The SEBI board has also referred to the government a proposal to create an Oversight Committee on Ethics and Compliance. This committee would supervise disclosures and recusal decisions involving board members to ensure independent oversight at the highest level.
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Meanwhile, SEBI will go ahead with internal reforms. These include changes to the SEBI (Employees' Service) Regulations, 2001, and a revision of the existing 2008 conflict of interest code for board members. The regulator will also introduce systems to implement a comprehensive conflict management framework across the organisation.
The decision follows recommendations made by a High-Level Committee chaired by former Chief Vigilance Commissioner Pratyush Sinha. The committee had recommended a comprehensive and legally enforceable framework to replace SEBI's existing conflict of interest guidelines.
The High-Level Committee had submitted its report to SEBI Chairman Tuhin Kanta Pandey in November last year, highlighting gaps in the current system and recommending a uniform and enforceable code aligned with global best practices.
SEBI's decision to approve the new code while sending sensitive governance proposals to the government reflects a balanced approach between regulatory independence and legal requirements. Once approved, the new framework is expected to strengthen accountability for both board members and senior officials.
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