SEBI Introduces Stricter Conflict Of Interest Rules

India's markets regulator has introduced a formal recusal framework requiring senior officials to step aside from decisions where they have personal, professional or financial conflicts of interest. The new framework also allows members of the public to report potential conflicts and requires the regulator to publish annual data on recusals.

The updated code of conduct follows allegations of conflicts of interest involving former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch in connection with the Adani Group.

Senior Officials Face Tougher Disclosure Requirements

Under the new rules, senior SEBI officials must recuse themselves from matters involving family members, relatives, close friends, associates from the previous three years, professional relationships or material financial interests. A material financial interest is defined as investments exceeding ₹2 million in an entity or holdings accounting for more than 5% of an official's total financial investments.

The chairperson, whole-time members, and other senior officers must also disclose their movable and immovable assets to an internal ethics office, which will oversee conflict-of-interest complaints.

Annual Reporting And Public Transparency

Whole-time members will be required to disclose details of family members, relatives, previous professional interests, assets, liabilities and investment holdings. They must also report rental arrangements, including the names of tenants and whether those tenants are entities regulated by SEBI.

The regulator will maintain a digital register of conflicts of interest and recusals and publish an annual summary. The report will include recusal data relating to the chairperson, whole-time members, part-time members and other senior officials.

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