By Nesil Staney
The high-level committee (HLC) constituted by the market regulator Sebi to address conflicts of interest — chaired by former chief vigilance commissioner Pratyush Sinha — is expected to submit its report this month. The report will recommend steps to enhance disclosures and manage conflicts of interest involving Sebi officials and board members.
The six-member committee, which includes billionaire banker Uday Kotak and other senior bureaucrats, will focus on improving transparency, accountability, ethical conduct, and provisions related to connected persons. Most importantly, experts say, the recommendations aim to strengthen the Sebi Board.
Former Sebi chairperson Madhabi Puri Buch, who made a lateral entry from the private sector to the helm, faced allegations of conflicts of interest related to the Adani Group. Another former chairperson, who previously headed a key market infrastructure institution (MII), also came under scrutiny due to an ongoing probe involving his former organisation.
These instances raised concerns about the impartiality of Sebi.“During the recent crisis, the board did not act. It is a messy arrangement where the Board and Chairman are on par. The focus will be to strengthen the board. The scope could be beyond Sebi, to other regulators like the Competition Commission, Reserve Bank and the insurance regulator,” said a HLC member.
The report will be filed around the end of July, he said. “We have met a lot of people to involve the public opinion in the report. We are seeking more suggestions,” he said.The HLC will find gaps in the existing framework and propose measures to mitigate conflicts of interest, including recusal policies, enhanced disclosure requirements, and investment restrictions such as cooling-off periods. It may also recommend third-party oversight and grievance redressal mechanisms, including a secure, anonymous whistleblower system with strict confidentiality protections, similar to provisions under the Ethics in Government Act in the United States.
“Clearly defined timelines for the examination and resolution of complaints, under the supervision of an independent review panel, along with periodic, privacy-compliant reporting, will help promote transparency and reinforce public trust,” said Shruti Kanodia, Managing Partner at Sagus Legal.
Injeti Srinivas, former secretary of the Ministry of Corporate Affairs, is the HLC vice-chairman, G. Mahalingam, former Sebi whole-time member, Sarit Jafa, former deputy comptroller and auditor general, and R. Narayanaswamy, former professor at IIM Bangalore, are the others. Sebi formed the HLC at its board meeting held on March 24, 2025. The HLC proposals could be a milestone in India’s regulatory governance, beyond Sebi.
“The lack of codified conflict of interest rules within Sebi has been a major systemic weakness. The HLC report will address these gaps and restore confidence in SEBI’s regulatory independence,” said Diviay Chadha, Partner, Singhania & Co.Recent controversies involving senior Sebi officials include receiving earnings from former employers, holding stakes in offshore funds linked to market manipulation, and family members receiving consultancy payments from corporate groups under Sebi’s purview. The measures expected from the HLC’s proposals are likely to enhance the independence and authority of the Board of India’s market regulator.
