Capital market regulator Sebi has notified the code of conduct for its board members.
It was adopted voluntarily by the regulator at its June 19, 2026 meeting to ensure that members of the board conduct in a manner that does not compromise the ability of the board to accomplish its mandate and also to enhance public trust in the ability of members to discharge their responsibilities in a fair and transparent manner.
In a notification released on Wednesday, the Sebi said the code covers the chairman, whole-time members (WTM) and part time member (PTMS), including ex-officio member, the family/spouse and dependent children of the WTM and PTM’s any person for whom they serve as legal guardian.
This Monday, the Sebi had also issued a code for its employees after their retirement or resignation clamping a two-year cooling-off period for new jobs, investments, job search notification among a host of other disclosures/resrtictions.
The code of conduct for the board members include “non-permitted investment” in equity or any instrument convertible into equity; and investment or trading in derivatives of equity or commodity, investment through a pooled investment vehicles, if the scheme of such pooled investment vehicle is professionally managed by an entity which is regulated by any of the financial sector regulator; and investments in units of Invits and Reits.
The code also defines “professional interest” by which it means any interest on account of employment/engagement as advisor/consultant during the last three years with an entity (excluding employments with governments or statutory bodies). The code also establishes an office of ethics and compliance at the Sebi.
For the chairperson, prior board approval is required for investments while for WTMs and PTMs, prior approval has to be taken from the chairperson.
WTMs are also asked to make the following disclosures about their family members, relatives, professional interests during the past three years, immovable properties, financial investments and liabilities, details of non-permitted investments held by family members, among others.
For the PTM, who is the ex-officio representative from the government or statutory organization, is not required to make disclosure of immovable property and financial investment, if it is already disclosed to the government/statutory body concerned. But a PTM, who is not an ex-officio representative from the government/statutory body, has to make these disclosure to the OEC.
On recusals, the code says the member shall recues himself/herself from a matter specifically relating to a person which falls within the scope of conflicted relationship. Recusal shall mean all of the following: not present when the matter relating to such a person comes up for discussion or decision; not having access to information relating to that matter; and not participating in discussion and in voting relating to that matter.