Does SEBI Have Sufficient Mechanisms to Tackle Conflict of Interest?
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Synopsis
In a recent parliamentary session, it's revealed that SEBI has established robust internal mechanisms to manage conflicts of interest. With a high-level committee in place, the focus is on enhancing transparency and accountability. Discover how these developments aim to restore investor trust in India's regulatory framework.
Key Takeaways
- SEBI has robust mechanisms for managing conflicts of interest.
- A high-level committee has been established for further enhancement of these frameworks.
- The committee will focus on transparency and ethical conduct.
- Recommendations are expected within three months.
- Disclosure of board members' conflicts of interest will be made public.
New Delhi, July 29 (NationPress) The Securities and Exchange Board of India (SEBI) possesses robust internal systems to effectively handle conflict of interest issues. This includes a comprehensive disclosure framework and specific provisions for recusal, as highlighted in the Parliament on Tuesday.
In response to a query in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary stated that to further enhance this framework, SEBI has established a high-level committee tasked with reviewing and proposing improvements to the current policies governing conflicts of interest, disclosures, and related issues concerning its officials and members.
When asked if any evaluations have been made to assess the impact of recent allegations on the overall stability of the stock market, and whether there are scenarios that might prompt the Ministry to recommend changes in leadership to restore investor trust in SEBI, he responded: "Employee-related issues are dealt with through the established internal governance mechanisms within SEBI."
Earlier in March, the markets regulator made a decision to create a high-level committee to review provisions concerning conflicts of interest, disclosures, and related matters involving its board members and officials, including the Chairperson.
This approval was granted during SEBI’s inaugural board meeting under its new Chairperson, Tuhin Kanta Pandey.
The committee is set to conduct a thorough review of the existing regulations related to conflicts of interest, examining the properties, investments, and liabilities of board members, as stated in an official announcement. It will comprise experts experienced in constitutional, statutory, and regulatory bodies, as well as professionals from government, public, and private sectors, and academia.
The committee’s primary goal is to reinforce SEBI’s framework for managing conflicts of interest, ensuring enhanced transparency, accountability, and ethical conduct. Recommendations from the committee are expected within three months of its formation, after which the board will deliberate on them.
Furthermore, the committee will re-evaluate the framework for conflicts of interest and require members to disclose their assets, including both movable and immovable properties.
The new Chairperson of SEBI has indicated that the regulator will publicize any conflicts of interest pertaining to its board members. This initiative aims to foster trust and transparency within the capital markets.
Point of View
It is crucial for regulatory bodies like SEBI to maintain an authoritative and transparent approach in managing conflicts of interest. This commitment to integrity is vital in bolstering investor confidence and ensuring fair practices in the financial landscape.
NationPress
20/08/2025
Frequently Asked Questions
What mechanisms does SEBI have to handle conflicts of interest?
SEBI has established internal mechanisms including a disclosure framework and provisions for recusal to effectively address conflicts of interest.
Who is leading the new committee formed by SEBI?
The new committee is led by the newly appointed Chairperson, Tuhin Kanta Pandey, and includes experts from various sectors.
What is the main objective of the high-level committee?
The primary objective of the committee is to strengthen SEBI's framework for managing conflicts of interest, ensuring transparency and accountability.
