SEBI Tightens Conflict-of-Interest Rules for Officials, Eases Trade Norms for Foreign Investors
India’s market regulator, the Securities and Exchange Board of India (SEBI), has approved stricter conflict-of-interest regulations requiring senior officials to either liquidate or freeze their personal equity investments upon joining and abstain from trading throughout their tenure. The move follows scrutiny over potential conflicts involving former SEBI chief Madhabi Puri Buch, who had faced allegations from Hindenburg Research regarding links to the Adani Group—claims that were denied by both parties. The revised rules, based on recommendations from a review panel formed in 2025, will take effect once notified by the federal government.
Under the new framework, SEBI has mandated enhanced transparency, requiring officials across the top four tiers, including the chairperson, to disclose their immovable assets. Officials must also recuse themselves from decisions where conflicts of interest may arise, with the regulator introducing a digital system to streamline the recusal process. SEBI noted that employee privacy concerns were considered while finalizing the updated guidelines, aligning the requirements with broader federal norms on asset declaration.
In a separate development, SEBI has eased transaction settlement norms for large foreign investors, allowing trades to be settled on a net basis instead of individually. This change is expected to reduce funding requirements and lower overall trading costs, potentially boosting market participation by global investors.
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