SEBI's Comprehensive Code of Conduct for Board Members

The Securities and Exchange Board of India (SEBI) has implemented a new code of conduct for its board members to enhance transparency, accountability, and public confidence in India's capital markets. This code was approved in a board meeting on June 19, 2026.

Key Provisions of the Code

• Stricter Rules: The code includes rules on investments, disclosures, conflicts of interest, gifts, and post-retirement employment.
• Applicable Members: The code applies to both whole-time members (WTMs), including the chairperson, and part-time members (PTMs).
• Objective: Ensures board members act independently and without personal or financial interest biases.

Context and Background

The expert committee was formed in March 2025 after SEBI's former chief faced allegations from Hindenburg Research regarding conflicts of interest involving offshore funds linked to the Adani Group.

Investment Restrictions

• WTMs are restricted from making fresh investments in equities, equity-linked instruments, and derivatives during their tenure.
• Existing investments must be sold, frozen, or disposed of via an approved trading plan; voting rights cannot be exercised.

Disclosure Requirements

• WTMs must disclose family and professional interests, properties, financial investments, liabilities, and transactions.
• Disclosures are required at joining, annually, and upon leaving office, with major changes reported promptly.
• PTMs have lighter disclosure obligations; some government representatives are exempt if similar disclosures are made to parent organizations.

Conflict-of-Interest Safeguards

• WTMs and family members are prohibited from accepting gifts from official SEBI contacts, except small tokens and gifts over Rs 50,000 must be reported.
• Members must recuse themselves from involvement in matters where conflicts of interest exist.
• A digital system will track disclosures and recusals, with an annual summary published in SEBI’s report.

Post-Retirement Employment Restrictions

• WTMs must disclose future employment negotiations while in office.
• After leaving, they are barred for two years from representing others before SEBI in regulatory matters.

Purpose and Impact

By enforcing stricter ethical standards, SEBI aims to reinforce the integrity and independence of its leadership, thereby enhancing public trust and adhering to high governance standards.