Recommended by a high-level committee (HLC) chaired by Pratyush Sinha in 2025, the code provides ethical guidelines for the chairman and whole-time members of the SEBI.
- The HLC was setup in backdrop of conflict of interest accusation by Hindenburg Research on the then SEBI Chairperson.
Key Changes in the SEBI Ethics Code
- Public Disclosures of assets and liabilities for the Chairperson, Whole-time Members (WTMs), etc.
- Chairperson and WTMs will also be deemed "insiders" under SEBI's Insider Trading Regulations and are prohibited from investing in equity.
- Members allowed maximum investment of only 25% of their portfolio in pooled vehicles like mutual funds, prohibited from accepting gifts or appearing before SEBI for two years post-retirement, etc.
- Creating an Office of Ethics and Compliance and an independent Oversight Committee on Ethics and Compliance.
- Establishing a secure, anonymous whistleblower system.
About Securities and Exchange Board of India (SEBI)
- Genesis: Initially constituted in 1988, as a non-statutory body; now a statutory body via SEBI Act, 1992.
- Headquarter: Mumbai; Regional Offices: New Delhi, Kolkata, Chennai, Ahmedabad
- Objectives: To safeguard investors from fraud, insider trading, and unfair practices.
- Functions: Registration and regulation of intermediaries (brokers, mutual funds, merchant bankers, credit rating agencies), and overseeing company takeovers; etc.
- Powers of SEBI: draft rules and regulations (e.g., Insider Trading Regulations); impose penalties in cases of fraud or unethical practices; and enforce regulations against violators.
