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

📌 Summary:

• SEBI has voluntarily adopted a comprehensive code of conduct for its board members to strengthen transparency, accountability and public confidence in capital markets (approved at the June 19, 2026 board meeting)
• Applies to both whole-time members (WTMs, including the chairperson) and part-time members (PTMs); tightens rules on investments, disclosures, conflicts of interest, gifts and post-retirement employment
• Trigger: an expert committee was formed in March 2025 after ex-SEBI chief Madhabi Puri Buch faced Hindenburg Research allegations (Aug 2024) of undisclosed offshore-fund stakes; the Buchs and Adani Group denied the allegations
• Key curbs: WTMs barred from fresh equity/derivative investments during tenure — existing holdings must be sold, frozen, or disposed under an approved trading plan, and cannot be used to vote
• Disclosures: WTMs must declare family, relatives, three-year professional interests, immovable property, investments, liabilities and major transactions — at joining, annually and on exit; some property details made public; PTMs have lighter obligations
• Cooling-off: WTMs barred for two years after leaving from appearing before/against SEBI; must disclose job negotiations while in office; gifts from those with official dealings prohibited

🎯 UPSC Relevance: GS2 — regulatory governance, transparency and accountability, conflict-of-interest safeguards in statutory regulators

📝 Prelims Facts:

• SEBI is the statutory regulator of India's securities/capital markets
• New code approved at the June 19, 2026 board meeting; covers WTMs and PTMs
• Post-exit cooling-off: two-year bar on appearing before/against SEBI

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