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An external panel set up by India’s market regulator will recommend that its chairman and senior officials disclose their assets publicly to preempt concerns related to conflict of interest, two sources with direct knowledge of the matter said.
The panel’s recommendations, if accepted, would bring SEBI in line with global practices.
The panel was set up after previous Securities and Exchange Board of India (SEBI) chief, Madhabi Puri Buch, faced allegations of conflict of interest from the now-shuttered Hindenburg Research.
Hindenburg alleged that Buch previously held investments in offshore funds connected to Adani Group, which added to conflict when the regulator investigated the group. Buch and the Adani group denied the charge.
In the US, Securities and Exchange Commission officials publicly file their assets, liabilities and transactions annually.
SEBI’s leadership to be urged to disclose assets, shares
The SEBI chairman and full-time members – the second rung of leadership – will be asked to disclose assets and shares held before joining the regulator, one of the source said.
The recommendations will be submitted to the regulator next month and will become law if accepted by its board, the sources added.
An emailed query sent to SEBI was not answered immediately, and neither was a request for comment to the vice chairman of the external committee.
SEBI policy prevents senior SEBI officers from holding any other office for profit or accepting any other professional fees. While disclosure of equity holdings and big transactions is mandated, they are kept confidential.
The panel will recommend that stricter norms applicable to its over 1,000 employees should be applied to the regulator’s board as well, the first source said.
A standard process for disclosure, recusals
The employee regulations include restrictions on SEBI officers and immediate family members holding direct equity exposure or trading in futures or options. They must also disclose personal assets and liabilities to senior officers.
The current code of conduct does not prevent SEBI leadership from holding shares but bars trading if in possession of price sensitive information.
The panel will recommend a standard process for disclosures, recusals and investments, the source said.
The chairman and board members typically recuse themselves from cases where there is a conflict, but the policy is not clearly defined.
The panel’s recommendations, if accepted, would bring SEBI in line with global practices.
The panel was set up after previous Securities and Exchange Board of India (SEBI) chief, Madhabi Puri Buch, faced allegations of conflict of interest from the now-shuttered Hindenburg Research.
Hindenburg alleged that Buch previously held investments in offshore funds connected to Adani Group, which added to conflict when the regulator investigated the group. Buch and the Adani group denied the charge.
In the US, Securities and Exchange Commission officials publicly file their assets, liabilities and transactions annually.
SEBI’s leadership to be urged to disclose assets, shares
The SEBI chairman and full-time members – the second rung of leadership – will be asked to disclose assets and shares held before joining the regulator, one of the source said.
The recommendations will be submitted to the regulator next month and will become law if accepted by its board, the sources added.
An emailed query sent to SEBI was not answered immediately, and neither was a request for comment to the vice chairman of the external committee.
SEBI policy prevents senior SEBI officers from holding any other office for profit or accepting any other professional fees. While disclosure of equity holdings and big transactions is mandated, they are kept confidential.
The panel will recommend that stricter norms applicable to its over 1,000 employees should be applied to the regulator’s board as well, the first source said.
A standard process for disclosure, recusals
The employee regulations include restrictions on SEBI officers and immediate family members holding direct equity exposure or trading in futures or options. They must also disclose personal assets and liabilities to senior officers.
The current code of conduct does not prevent SEBI leadership from holding shares but bars trading if in possession of price sensitive information.
The panel will recommend a standard process for disclosures, recusals and investments, the source said.
The chairman and board members typically recuse themselves from cases where there is a conflict, but the policy is not clearly defined.
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