SEBI Enhances Conflict of Interest Management Framework
Strengthening Internal Mechanisms at SEBI
New Delhi, July 29: The Securities and Exchange Board of India (SEBI) has established robust internal protocols to tackle conflict of interest issues, which encompass a disclosure framework and recusal provisions, as stated in Parliament on Tuesday.
In response to a query in the Rajya Sabha, Finance Minister of State Pankaj Chaudhary mentioned that to further enhance this framework, SEBI has initiated a high-level committee tasked with reviewing and recommending improvements for managing conflicts of interest, disclosures, and related matters concerning its officials and members.
When asked if an evaluation had been performed to assess the impact of recent allegations on overall stock market stability, and whether the Ministry would suggest leadership changes to restore investor confidence in SEBI, he replied: "Employee-related issues are managed through established internal procedures and governance mechanisms within SEBI."
In March, the market regulator decided to establish a high-level committee to examine provisions related to conflict of interest, disclosures, and other matters concerning its officials and board members, including the Chairperson.
This decision was made during SEBI's inaugural board meeting under the new Chairperson, Tuhin Kanta Pandey.
The committee is set to conduct a thorough review of existing regulations regarding conflict of interest, focusing on the property, investments, and liabilities of board members. It will comprise experts with backgrounds in constitutional, statutory, and regulatory bodies, as well as experience in government, public and private sectors, and academia.
The primary aim of this panel is to fortify SEBI's framework for managing conflicts of interest, ensuring transparency, accountability, and ethical behavior. The committee is expected to present its recommendations within three months of its formation, after which the board will evaluate them.
The panel will reassess the conflict of interest framework and require members to disclose their movable or immovable properties and other assets.
The new SEBI Chairperson has indicated that the regulator will publicly disclose any conflicts of interest involving its board members, aiming to enhance trust and transparency in the capital markets.