Daijiworld Media Network – Mumbai
Mumbai, Jul 16: Market regulator Securities and Exchange Board of India (SEBI) has adopted a comprehensive new Code of Conduct for its Board members, introducing stricter conflict-of-interest rules, enhanced disclosure norms and tighter investment restrictions to strengthen transparency and public confidence.
The Code, voluntarily adopted by SEBI's Board in June 2026, replaces the broad ethical principles that had been in place since 2008 with a detailed governance framework featuring enforceable rules, reporting requirements and institutional oversight.
One of the key changes relates to investment norms for Whole-Time Members (WTMs), including the Chairperson. During their tenure, WTMs and their family members will not be allowed to make fresh investments in listed equities, convertible securities, or equity and commodity derivatives. However, investments through professionally managed instruments such as mutual funds, REITs and InvITs will continue to be permitted.
Existing investments held before joining SEBI may be liquidated, frozen until the end of the member's tenure, sold through a pre-approved trading plan or disposed of with prior approval. Current WTMs have been given one month to comply with the new rules after the Code comes into force.
Unlike WTMs, Part-Time Members (PTMs) will only be required to disclose their equity holdings, annual transactions and professional interests, and will not face restrictions on fresh investments.
The new Code also significantly expands disclosure requirements. WTMs must disclose details relating to family members, professional engagements over the previous three years, immovable properties, financial investments, liabilities, rental agreements and specified financial transactions. Transactions involving financial assets above prescribed limits and liabilities exceeding Rs 2 lakh must also be reported, while changes in property ownership or family details must be disclosed within one month.
SEBI will publish details of immovable properties owned by WTMs, although exact addresses will remain confidential.
Conflict-of-interest provisions have also been strengthened. Board members will be required to recuse themselves from matters involving organisations where family members hold key positions, entities with which they have had recent professional associations, close personal relationships that could create bias or situations involving significant financial interests.
The regulator has defined a material financial interest as investments exceeding Rs 20 lakh or more than five per cent of a member's total financial investments. A digital system will maintain records of disclosures and recusals, while an annual summary will be published in SEBI's Annual Report.
For the first time, the Code also introduces a public complaint mechanism, allowing individuals to report potential conflicts of interest with supporting evidence. Complaints will be examined by the Office of Ethics and Compliance before being referred to the Chairperson or the Board where necessary.
The framework further tightens rules on gifts and post-retirement employment. WTMs cannot accept gifts from individuals or entities having official dealings with SEBI, while gifts from personal acquaintances exceeding Rs 50,000 must be disclosed. They must also disclose negotiations for future employment while in office and will be barred from appearing before or against SEBI in quasi-judicial or regulatory matters for two years after leaving the organisation.
The revamped Code replaces the earlier principles-based framework with measurable standards, structured disclosures and objective conflict-management rules, marking a significant step towards strengthening governance and accountability at India's capital markets regulator.