Mint Explainer | Can Sebi’s new conflict rules fix its governance gaps?

Sebi) on Monday approved a sweeping set of regulations based on recommendations of a high-level committee (HLC), aligning rules for senior officials with those applicable to employees and plugging gaps in transparency, recusals and personal investments.Mint explains the new rules and whether they are enough to ensure accountability in Sebi’s top brass.Sebi has introduced a tighter disclosure and recusal framework. The chairman, whole-time members (WTMs) and employees must make initial, annual and event-based disclosures of assets, liabilities, trading activity and relationships, and disclose any negotiations for future employment.The rules mandate recusal in cases of material financial interest or other conflicts, with a digital system to record disclosures and approvals.Public disclosure rules have been only partially expanded.

Immovable property details of top officials, including the chief general manager (CGM) and those above the CGM, will be disclosed in line with civil services rules, while broader asset and liability disclosures will remain internal.Sebi will also set up an Office of Ethics and Compliance, along with a whistle-blower mechanism, to strengthen oversight.The board has extended uniform restrictions on investments in equities and equity-related instruments to the chairman and WTMs, bringing them in line with employees. Upon assuming office, they must liquidate, freeze, or sell existing holdings, either through a pre-declared trading plan or with prior approval.Investments in commercial ventures, including unlisted companies, must be liquidated or frozen during their tenure, and vested stock options must be exercised before joining.Officials can continue to invest in professionally managed pooled