SEBI to constitute committee to decide on conflict of interest of board members

SEBI forms HLC to review conflict of interest, disclosure provisions; increases FPI threshold to ₹50,000 crore.

In the back of conflict-of-interest allegations being hurled at the regulator in the recent past, the Securities & Exchange Board of India (SEBI) board at it’s meeting held on Monday (March 24, 2025) decided to constitute a High-Level-Committee (HLC) to undertake a comprehensive review of the provisions relating to conflict of interest, disclosure pertaining to property, investment and liabilities and related matters in respect of SEBI members and officials of the board.

“The HLC will comprise eminent persons and experts with relevant background and experience in constitutional/ statutory/ regulatory bodies , Government / public sector/ private sector and academia,” SEBI Chairman Tuhin Kanta Pandey said after the board meeting.

The names of the HLC members will be announced shortly and the HLC is expected to submit the recommendation within three months of from the date of constitution and it would be placed before the board for consideration.

“The objective of the HLC is to comprehensively review and make recommendations for enhancing the existing framework for managing conflict of interest, disclosure and related matters towards ensuring the high standards of transparency, accountability and ethical conduct of members and officials of the board, Mr Pandey said. 

Answering questions on the timing of the decision to constitute a committee, he said, “There was a certain trust that needs to be built up and people in both our organization and outside, need to be clear that things are fine. There is no tendency to hide. We don’t want to do that. But we need to have a framework.” 

He added that disclosure would not be possible in the non-existence of a framework. Further, he said that the board would not be looking at implementing the revised code of conduct retrospectively. Reiterating that accountability was important in a democracy, he said that the code of conduct framework was about the nuances of the responsibility. He further said that there was a need to balance privacy of officers with transparency that would come from disclosures. 

In another important decision the SEBI board approved a proposal to increase the applicable threshold from the present ₹25,000 crore to ₹50,000 crore for Foreign Portfolio Investors (FPI) operating in India.