The Securities and Exchange Board of India Board approved major recommendations of the High-Level Committee (HLC) to strengthen the conflict-of-interest, disclosure, and ethics framework for SEBI Members and employees. The reforms introduce stricter investment and trading restrictions for the Chairman and Whole-Time Members (WTMs), including options to liquidate, freeze, or divest existing holdings, while bringing them under the definition of “insiders.” The framework also aligns the definition of “family,” mandates disclosure of future employment negotiations, and requires periodic disclosures of assets, liabilities, trading activities, and relationships. 

SEBI approved the establishment of a digital conflict-management and whistleblower system, along with a new Office of Ethics and Compliance (OEC) supervised initially by the Chief Vigilance Officer. Additional measures include restrictions on investments by spouses and dependent family members, limits on exposure to a single SEBI-registered intermediary, and a formal digital recusal mechanism for handling conflicts of interest. Certain recommendations, including creation of a separate regulatory framework and an Oversight Committee on Ethics and Compliance for Board Members, were referred to the Central Government for consideration. The implementation will involve amendments to SEBI Employees’ Service Regulations, 2001, revision of the 2008 Code on Conflict of Interest, and development of supporting operational systems and processes.

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