Investor Trust At Stake: SEBI Moves to Close Accountability Gaps at The Top

The board of the Securities and Exchange Board of India (SEBI) on Monday approved a revised code of conduct aimed at strengthening conflict of interest disclosures for its whole-time members (WTMs) and officials. The move is intended to enhance transparency, accountability, and institutional integrity within the regulator through stricter compliance mechanisms and improved monitoring systems.

Under the new framework, SEBI will introduce more rigorous disclosure requirements covering both financial and non-financial interests of its officials. The revised norms also mandate periodic reporting, stronger recusal provisions in cases of potential conflict, and the use of technology-driven systems to track and manage such situations more effectively. The objective is to create a structured and enforceable system that minimises risks of bias in decision-making.

However, proposals concerning SEBI board members will require approval from the central government. As the government is responsible for appointing board members and determining their service conditions, any changes related to their disclosures and conflict management framework will be subject to its final decision. This includes the introduction of separate regulations specifically tailored for board-level governance.

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In addition, SEBI has referred a proposal to the government for the creation of an independent oversight committee on ethics and compliance. This proposed body would supervise disclosures and recusal decisions involving board members, ensuring an added layer of scrutiny and independence at the highest levels of the regulator’s functioning.

Internally, SEBI plans to proceed with a series of reforms, including amendments to the SEBI (Employees' Service) Regulations, 2001, and a revision of the existing 2008 conflict of interest code applicable to board members. These changes are part of a broader effort to establish a comprehensive conflict management framework across the organisation.

The decision follows recommendations made by a high-level committee chaired by Pratyush Sinha, which had submitted its report to SEBI Chairman Tuhin Kanta Pandey in November last year. The committee highlighted gaps in the existing system and called for a uniform, legally enforceable code aligned with global best practices. SEBI’s move reflects a calibrated approach, balancing regulatory autonomy with statutory requirements, and is expected to strengthen governance standards within the institution.

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