The Securities and Exchange Board of India (SEBI) has released the detailed code of conduct for its members, laying down the operational framework for the conflict-of-interest norms approved by its Board last month. As reported by The Hindu BusinessLine, the Code, voluntarily adopted by SEBI's Board in June 2026, prescribes standard disclosure formats for Whole-Time Members (WTMs) and Part-Time Members (PTMs), detailing the information they must periodically furnish on their financial interests, immovable properties, liabilities, professional engagements and family relationships. The detailed code follows the Board's approval of a revamped conflict-of-interest framework last month, which introduced mandatory recusal norms, expanded disclosure requirements, restrictions on investments by officials and their immediate family members, and the creation of an Office of Ethics and Compliance to oversee implementation of the framework.
Under the new code, Whole-Time Members will have to disclose details of their family members and relatives, professional interests over the previous three years, immovable properties, financial investments, liabilities and rental contracts. According to the latest implementation, the disclosure requirements also extend to rental agreements involving immovable property and transactions in financial assets and real estate during their tenure. The framework specifies that liabilities above ₹2 lakh must be disclosed, while transactions in financial assets by WTMs or their family members are reportable if the value exceeds two times the official's monthly basic pay. The code also prescribes a format for disclosure of non-permitted investments held by family members, including investments acquired through relaxations such as discretionary portfolio management services, unlisted companies and employee stock option plans. For immovable property disclosures that are made public, the code said that full addresses need not be disclosed to address privacy concerns. Changes in family relationships, property transactions and rental contracts must be reported within one month, with disclosures required when joining SEBI, annually and again when leaving office.
For Part-Time Members, the code requires disclosures relating to family members, investments in equity and equity-linked instruments, annual transactions in such investments, and professional interests during the previous three years as well as those acquired during their tenure. The detailed code introduces a standard format for reporting recusals in SEBI's Annual Report, with the disclosure capturing the number of recusals by the Chairperson, Whole-Time Members, Part-Time Members, Executive Directors and Chief General Managers during the year. The framework allows the public to flag potential conflicts and mandates annual disclosure of recusal data, with SEBI maintaining a digital record of conflicts and recusals and publishing annual recusal data. Government and statutory organisation representatives will be exempt from filing property and financial investment disclosures with SEBI if they already submit such information to their parent organisations.
The Securities and Exchange Board of India (SEBI) has implemented comprehensive changes to its employee service regulations, mandating that all employees must exit, freeze, or plan disposal of non-permitted investments upon joining the regulator. According to the latest gazette notification dated July 11, new employees must liquidate non-permitted investments, freeze them, or disclose a time-bound plan to exit such holdings when they join SEBI. Existing employees holding such investments will also be given a timeline to either liquidate or freeze them. The regulations specifically prohibit investments in equity, instruments convertible into equity, and derivatives of equity or commodity for both employees and their family members during service. The Securities and Exchange Board of India (Employees' Service) (Amendment) Regulations, 2026, notified on July 7, 2026, come into force on publication in the Official Gazette.
SEBI has introduced a 17-page code of conduct for board members that significantly tightens rules on conflicts of interest, disclosures, recusals, and non-permitted investments. The revised code explicitly bars whole-time members (WTMs) and their families from making fresh investments in equities, equity-linked instruments or equity and commodity derivatives during their tenure. Members joining SEBI with existing equity holdings will have four options: liquidate those investments, freeze them until the end of their tenure, sell them through a pre-disclosed trading plan under insider trading regulations, or sell them with prior approval. Equity holdings in their own commercial ventures can only be sold or frozen, with members not allowed to exercise voting rights attached to those shares during tenure. However, investments through professionally managed pooled investment vehicles like mutual funds, as well as investments in REITs and InvITs, are allowed. The code introduces a cap on investments in products offered by any one SEBI-regulated entity managing pooled investment vehicles, limiting such exposure to 25% of total financial investments. Additionally, WTMs have been deemed insiders under the SEBI (Prohibition of Insider Trading) Regulations and will be bound by their provisions.
The code establishes detailed recusal provisions requiring members to step aside from matters where a conflict exists. A member must recuse if the matter involves an entity where a family member or relative is employed in senior management, where the member has a professional or relational interest that may create actual or perceived bias, where a close friend or associate is involved, or where the member has a material financial interest. The framework allows any person to approach SEBI's Office of Ethics and Compliance if they have reasonable grounds, supported by evidence, to believe a board member has a conflict of interest in a particular matter. The OEC will examine the complaint, seek the member's explanation and, if necessary, refer the matter to the Chairperson or the Board for a final determination. If a conflict is established, the concerned member must recuse from the matter. Whole-time members cannot solicit or accept gifts from people with whom they have official dealings or from subordinate employees, with restrictions extending to gifts accepted by family members on their behalf. The definition of gifts includes free transport, accommodation and other pecuniary advantages but excludes token items such as mementos, bouquets, diaries and calendars. Members may accept gifts from personal friends during occasions such as weddings or religious functions, but gifts exceeding ₹50,000 from any one person must be reported to the Office of Ethics and Compliance.
