A high-level committee set up to review the Securities and Exchange Board of India’s (SEBI) internal conduct norms has recommended a sweeping overhaul of its conflict-of-interest framework, including stronger disclosure rules, creation of an independent ethics office, and tougher post-retirement restrictions to enhance transparency and credibility at the markets regulator.
In its report submitted to SEBI Chairman Tuhin Kanta Pandey, the panel recommended a uniform definition of conflict of interest, “family”, and “relative” for both board members and employees, bringing clarity and consistency across the organisation. The committee proposed that disclosures cover financial, professional, and close personal relationships that could create actual or perceived conflicts.
“The recommendations for SEBI board members may be implemented by notifying a separate set of regulations for SEBI Board Members for Disclosures and Management of Conflict of Interest. This would make it legally enforceable unlike the current Code, which is more akin to voluntary adoption,” the committee said in its 98-page report.
Multi-tier disclosure of assets, liabilities
One of the key recommendations were multi-tier disclosures, to include initial, annual, event-based, and exit filings of assets, liabilities, and relationships by all SEBI members and employees. Importantly, it proposed that the Chairperson, whole-time members, and senior officials at and above the post of Chief General Manager publicly disclose their assets and liabilities on SEBI’s website to improve transparency.
It also suggested setting up an Office of Ethics and Compliance (OEC) headed by a Chief Ethics and Compliance Officer, and an Oversight Committee on Ethics and Compliance (OCEC) comprising SEBI board members and external experts. These bodies would monitor disclosures, recusals, and conflict cases, and publish a summary of recusals in SEBI’s annual report.
The panel also recommended uniform investment restrictions across SEBI’s hierarchy and inclusion of the Chairperson and Whole-time Members as “insiders” under the insider trading regulations. Gifts would be prohibited in line with SEBI’s employee service rules.
To prevent regulatory capture, the committee proposed a two-year cooling-off period barring former members and employees from appearing before or against SEBI or taking up assignments with entities under its purview. It also urged mandatory disclosure of any ongoing employment negotiations before demitting office.
Further, the committee called for a dedicated whistleblower framework allowing internal and public reporting of ethical breaches, with anonymity safeguards and protection against retaliation. It recommended leveraging digital systems for conflict tracking and instituting regular ethics training to foster a “zero-tolerance culture.”
The panel said SEBI’s current code lacks legal enforceability and urged the regulator to notify formal regulations under the SEBI Act to give the framework statutory backing.
If adopted, these measures would bring SEBI’s governance standards closer to those of global peers such as the US SEC and UK’s Financial Conduct Authority, the report said.
Published on November 12, 2025
