Trust building, updation of 2008 norms: SEBI's Chief explains need for new conflict-of-interest committee

He was responding to a question whether the setting up of the committee indicated a concern about conflict of interests of SEBI officials in the past. The former SEBI Chairperson Madhabi Puri Buch had faced allegations of conflict of interest, which Buch and the regulator had denied.

The new SEBI chief was also asked if the new committee and the norms would be applied retrospectively. To which he said, "How can we retrospectively change behaviour? We are not a time machine. Let's move forward."

Provide clarity

Pandey said that a framework is expected to give clarity to both the regulator's officials on what disclosures need to be made and how they need to be made, and to investors and the market participants on where queries and complaints on this can be raised. He said that the process for a SEBI official recusing themselves from a proceeding where there is a conflict of interest will very much be delibrated on by the HLC.

The committee is expected to make its recommendation within three months from the date of its constitution, and these recommendations will be placed before SEBI for consideration.

Self regulation?

While the HLC will do a comprehensive review of the conflict of interest code, the monitoring of these disclosures on an ongoing basis will be done by SEBI itself. "This is SEBI's initiative, and SEBI will do it (monitoring of disclosures). We can self regulate... we have come forward (with this idea) and we are trying to be open," said Pandey.

The Chairman pointed out that there is a trade off made by public officials, of giving up their privacy to an extent, in the interest of transparency. He said that this is more so in the case of SEBI since it is a market regulator and the accountability expected from it is of a higher order.

"If you really see accountability in Indian context, we have many eyes... There is an accountability to judiciary, to the Parliament, to the media, to our internal organisational structure. The question is on how much accountability should be there but there is also right to privacy to be taken care of. ..On the public space, we have to shed a level of privacy to do a public function, then we moved towards more of transparency at the cost of privacy," said Pandey, adding that this kind of accountability is expected more from an institution like SEBI.

Committee members

According to the press statement, the HCL will comprise of "eminent persons and experts with relevant background and experience in constitutional / statutory/ regulatory bodies, government / public sector, private sector and academia". When asked if there are people already being considered for this HLC, Pandey said that SEBI's Board has just given the nod (on March 24) so now the process of appointing people for this committee will start.

Pandey had first spoken about the regulator considering a new framework for disclosing conflict-of-interest for SEBI officials at Moneycontrol's Global Wealth Summit 2025 held in Mumbai on March 7.