SEBI has introduced a stricter Code of Conduct for its Board members effective June 2026 to improve transparency. The new rules restrict new stock investments by Whole-Time Members and their families while mandating deeper financial disclosures. The move allows the public to report conflict-of-interest concerns directly to the regulator’s ethics office.
The Securities and Exchange Board of India (SEBI) has launched a new Code of Conduct for its Board members, replacing the previous 2008 guidelines. This update, which came into effect in June 2026, aims to strengthen governance by setting tighter boundaries for personal financial dealings among those who lead India's capital market regulator.
Stricter Rules for Investments
A major change under the new framework is the restriction on personal trading for Whole-Time Members (WTMs), including the Chairperson. These officials and their immediate family members are now banned from making fresh investments in listed shares, convertible securities, or equity and commodity derivatives while in office. While investments in mutual funds, Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs) are still allowed, any existing equity holdings must now be managed through a pre-approved trading plan, frozen, or sold. These measures are designed to ensure that the regulator's leadership remains focused solely on market integrity without potential personal conflicts.
New Disclosure and Public Accountability
Transparency requirements have been significantly increased. WTMs must now disclose detailed financial information, including the assets and liabilities of their family members. Transactions involving financial assets worth more than double a member's monthly basic pay, or liabilities exceeding Rs 2 lakh, must be reported. Additionally, information regarding immovable properties owned by WTMs will now be made available to the public, though specific addresses will remain private to ensure security.
In a notable move toward greater public oversight, SEBI has established an Office of Ethics and Compliance (OEC). For the first time, members of the public can submit concerns regarding potential conflicts of interest involving Board members. The new code clarifies that a conflict of interest exists if a member has a material financial interest, defined as investments over Rs 20 lakh or more than 5% of their total financial portfolio, in an entity being discussed by the Board.
Restrictions Beyond Tenure
The updated code also addresses professional life after leaving the regulator. Former WTMs are now barred from appearing before or against SEBI in any quasi-judicial proceedings for a period of two years after their tenure ends. Furthermore, strict rules regarding the acceptance of gifts have been set, requiring disclosure for any gift received during social occasions valued up to Rs 50,000. These changes reflect a move to prevent any perception of bias in regulatory decision-making, which remains a core monitorable for investors as the market watches how these governance standards influence future regulatory actions and policy stability.