SEBI Constitutes High-Level Committee Headed by Pratyush Sinha to Review Conflict of Interest Norms

SEBI has formed a six-member High-Level Committee (HLC) to not only examine but also improve its current framework on conflicts of interest and disclosures by board members and staff in a clear attempt to boost ethical governance. Not only recent disputes but also increased public scrutiny of the capital market regulator's governance procedures have prompted this action.

The newly formed committee will be chaired by Pratyush Sinha, a retired Indian Administrative Service (IAS) officer and former Chief Vigilance Commissioner. Injeti Srinivas, former Secretary of the Ministry of Corporate Affairs and ex-Chairman of the International Financial Services Centres Authority (IFSCA), has been appointed as the Vice-Chairman.

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Other distinguished members of the panel include Uday Kotak, Founder and Director of Kotak Mahindra Bank; G Mahalingam, former Executive Director of the Reserve Bank of India and former Whole-Time Member of SEBI; Sarit Jafa, former Deputy Comptroller and Auditor General of India; and Professor R Narayanaswamy, a former professor at the Indian Institute of Management, Bangalore.

To conduct a comprehensive review of SEBI’s 2008 Code of Conduct, particularly its provisions related to not only conflict of interest, disclosures regarding property, investments, liabilities, but also related governance practices are the primary mandate of the committee.

SEBI mentioned in its official release that the committee will aim to not only identify gaps or ambiguities in the current regulatory framework but also make robust recommendations to align SEBI’s internal governance with the highest standards of transparency, accountability, and ethical conduct.

The terms of reference laid out for the committee include recommending a comprehensive recusal policy, enhanced disclosure requirements—including public disclosures—and restrictions on personal investments of board members and senior officials. The committee is also tasked with suggesting protocols for maintaining digital records and a system for ongoing monitoring of compliance.

Importantly, the HLC will also design a framework enabling members of the public to raise complaints related to conflicts of interest or non-disclosures. The mechanism will include a structured process to not only examine such complaints efficiently but also with accountability.

SEBI Chairperson Tuhin Kanta Pandey, who recently succeeded Madhabi Puri Buch, has spearheaded this initiative following allegations last year that questioned Buch’s impartiality in matters involving the Adani Group, especially after the Hindenburg report. The establishment of the committee was approved during SEBI’s board meeting on March 24, Pandey’s first since taking office.

The committee is expected to submit its recommendations within three months from the date of its constitution, after which the SEBI board will not only deliberate on but also potentially implement the proposed reforms. The formation of this high-powered panel reflects SEBI's renewed focus on not only reinforcing market integrity but also restoring public trust in its regulatory oversight amidst growing calls for not only institutional transparency but also ethical governance.