SEBI introduced a recusal framework for senior officials to avoid conflicts of interest, requiring disclosure of assets and recusals, and allowing public flagging of potential conflicts.
India’s markets regulator on Wednesday introduced a formal recusal framework requiring its senior officials to step aside from matters where they face personal, professional or financial conflicts.
The framework also allows the public to flag potential conflicts and mandates annual disclosure of recusal data.
Here are the key provisions of the stricter code of conduct, introduced after former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch faced allegations of conflicts of interest linked to the Adani Group.
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Senior SEBI officials will be required to recuse themselves from matters involving family members, relatives, close friends, associates from the previous three years, professional relationships, or material financial interests. The regulator defined a material financial interest as investments of more than 2 million rupees in an entity or holdings representing over 5% of an official’s total financial investments
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Senior officers, including whole-time members and the chairperson, will be required to disclose their movable and immovable assets to an internal ethics office, which will also be responsible for handling complaints related to potential conflicts of interest
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Disclosure requirements for whole-time members also cover family members, relatives, past professional interests, assets, liabilities and investment holdings. Officials will also have to disclose rental arrangements, including tenant names, whether tenants are SEBI-regulated entities.
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SEBI will maintain a digital record of conflicts and recusals and publish annual recusal data. It will include summaries of recusals by the chair, whole-time members, part-time members and senior officials to appear in the regulator’s annual report
