Sebi chief says board to consider panel report on disclosures, conflict of interest on Dec 17

New Delhi, Nov 14 (PTI) The Sebi board will take up on December 17 the report of a high-level panel, which had recommended public disclosure of assets of senior officers to avoid conflict of interest, Chairman Tuhin Kanta Pandey said on Friday.

A Sebi panel in its report has proposed comprehensive reforms to bring in transparency by way of greater disclosure and a "zero-tolerance" culture to address conflict of interest of top officials of the capital market regulator.

The high-level panel submitted its report to Chairman Pandey on November 10. The report has also recommended setting up a secure and anonymous whistleblower system for reporting conflict of interest, ban on expensive gifts, a two-year restriction on post-retirement assignments, and creating a post of Chief Ethics and Compliance Officer (CECO).

The Committee on Conflict of Interest, Disclosures and Related Matters said the Sebi Chairman, whole-time members, and chief general manager-rank officers should make public disclosure of their assets and liabilities.

It further said applicants for the post of chairman and members, and for lateral entry positions, must disclose "actual, potential, and perceived conflict-of-interest risks of financial and non-financial nature" to the appointing authority.

"The board will take a final call on the recommendations made in the report," Pandey told reporters after inaugurating the Sebi pavilion at the India International Trade Fair (IITF) here.

Sebi board is scheduled to meet on December 17.

The panel has also given an elaborate classification of conflict of interest, which could be in the nature of financial, relational, professional, duty-related, or perceived.

"Adoption of these reforms will align Sebi with international best practices, strengthen its reputation, and reinforce its independence and integrity as India's capital market regulation," the committee said in its 98-page report.

It has also suggested that all Sebi board members and employees should make initial, annual, event-based and exit disclosures of assets, liabilities, trading activities and family relationships as well as other professional and relational interests.

The disclosure is to be made to the proposed Sebi's Office of Ethics and Compliance (OEC) and the Oversight Committee on Ethics and Compliance (OCEC).

Also, it recommended "induction and refresher training that stresses ethical conduct and fostering a zero-tolerance culture for conflict of interest".

In March, the Sebi board had decided to constitute the committee to undertake a comprehensive review of the existing provisions related to conflict of interest and disclosures of property, investments, liabilities, and other related matters by Sebi members and officials.

The move came in the wake of allegations against former Sebi Chairperson Madhabi Puri Buch, who was accused of holding back on investigations against the Adani group because of a conflict of interest.

The committee's mandate included reviewing current policies and frameworks governing conflict of interest and identifying any gaps or ambiguities, and suggesting a mechanism for members of the public to raise concerns pertaining to conflict of interest and disclosures, including a process to examine complaints.

The high-level committee comprised former Chief Vigilance Commissioner Pratyush Sinha as chairman, Injeti Srinivas as Vice Chairman, Uday Kotak, G Mahalingam, Sarit Jafa, and R Narayanaswamy as members.

Pandey's predecessor Buch, who demitted office at the end of February, had come under attack last year from now-shuttered Hindenburg Research, which alleged that she and her husband held "hidden" holdings in Bermuda and Mauritius entities also drawn upon by the older brother of Adani group founder Gautam Adani, which possibly held the agency back from investigating fraud charges against the powerful conglomerate.

Both Buch and the Adani group had denied all allegations. PTI JD TRB