The Securities and Exchange Board of India (SEBI) has adopted a comprehensive code of conduct for its board members, introducing stricter norms on investments, disclosures, conflicts of interest, gifts and post-retirement employment to enhance transparency, accountability and public confidence in the capital markets.
According to a statement issued by the market regulator, the new code was approved at SEBI’s board meeting on June 19 and will apply to both whole-time members (WTMs), including the chairperson, and part-time members (PTMs).
Under the revised framework, whole-time members will be prohibited from making fresh investments in equities, equity-linked instruments, and equity or commodity derivatives during their tenure.
WTMs holding such investments before assuming office must either sell, freeze or otherwise dispose of them under an approved trading plan. Existing holdings cannot be used to exercise voting rights while they remain in office. However, WTMs will be permitted to invest through professionally managed pooled investment vehicles such as mutual funds, Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
The code also strengthens disclosure requirements. WTMs must report every transaction in financial assets undertaken by themselves or their family members using funds received from the WTM, or in assets in which the WTM has an interest, if the value of the transaction exceeds twice the member’s monthly basic pay.
In addition, WTMs are required to disclose changes relating to family or relatives’ details, rental agreements and transactions involving immovable property—including purchases, sales, gifts and inheritance—to the Oversight and Ethics Committee (OEC) within one month from the end of the month in which the change occurs.
While small tokens such as bouquets, diaries and souvenirs are permitted, gifts valued above ₹50,000 received from personal friends on social occasions must be reported to the OEC.
SEBI said details of immovable properties disclosed by whole-time members will be made public by the Oversight and Ethics Committee in accordance with the prescribed disclosure format.
Part-time members will have comparatively lower disclosure obligations. The code exempts ex-officio government representatives from certain disclosure requirements where similar disclosures are already made to their parent organisations. Other part-time members will be required to disclose their equity investments, professional interests and annual securities transactions.
(With inputs from ANI)
