SEBI adopts new code of conduct for board members to boost transparency, public confidence

📌 Summary:

• The Securities and Exchange Board of India (SEBI) voluntarily adopted a comprehensive code of conduct for its board members (approved June 19, 2026) to strengthen transparency, accountability and public confidence in capital markets
• Trigger: an expert committee was formed in March 2025 after former SEBI chief Madhabi Puri Buch faced conflict-of-interest allegations (August 2024) from short-seller Hindenburg Research over alleged hidden offshore-fund stakes linked to the Adani Group; the Buchs and Adani denied the claims
• Investment curbs: whole-time members (WTMs), including the chairperson, cannot make fresh investments in equities, equity-linked instruments or equity/commodity derivatives during tenure; existing holdings must be sold, frozen, or disposed under an approved trading plan and cannot be used for voting rights
• Disclosure and gifts: WTMs must declare family details, professional interests (past 3 years), immovable property, investments and liabilities at joining, annually and after leaving; some property details go public; gifts from those dealing with SEBI are barred (small tokens allowed; gifts over Rs 50,000 from personal friends must be reported to the Office of Ethics and Compliance)
• Recusal and cooling-off: members must recuse from matters involving entities where they/family have significant interests; a digital system logs disclosures and recusals (published annually); WTMs face a two-year post-retirement bar on appearing before SEBI; part-time and ex-officio members have lighter obligations

🎯 UPSC Relevance: GS2 (regulatory governance, transparency and accountability of statutory bodies, conflict of interest) with GS3 linkage (integrity of capital markets).

📝 Prelims Facts:

• SEBI is a statutory body under the SEBI Act, 1992, regulating securities markets
• The code applies to whole-time members (WTMs) and part-time members (PTMs); gift-reporting threshold Rs 50,000; two-year post-retirement cooling-off for WTMs
• Complaints go to SEBI's Office of Ethics and Compliance (OEC)

🔑 Key Term: Conflict of interest — a situation where a regulator's personal/financial interests could improperly influence official decisions.