The committee also recommended that applicants for the positions of chair and members of the Securities and Exchange Board of India should disclose actual, potential, and perceived conflict-of-interest risks of financial and non-financial nature to the finance ministry.
The panel’s report will be taken to the board of the markets regulator before any decisions are taken on its recommendations, Tuhin Kanta Pandey, SEBI Chairman, told Reuters on Wednesday.
The recommendations, if accepted, would bring SEBI in line with its global peers. The U.S. Securities and Exchange Commission’s officials publicly file their assets, liabilities and transactions annually.
The panel was set up after the previous SEBI chief, Madhabi Puri Buch, faced charges of conflict of interest from the now-shuttered Hindenburg Research, which alleged that Buch previously held investments in offshore funds connected to the Adani group, which was being investigated. Buch and the Adani group had denied the charges.
The panel’s other recommendations include trading and investing restrictions for the chair and ranking officials, in line with those for the regulator’s other employees. SEBI employees and members of the board, including the chair, whole-time members and external members can make fresh investments in only pooled and professionally-managed financial instruments such as mutual funds, insurance products and pension funds, the panel has recommended.The investment restrictions should also apply to the spouse irrespective of their financial status, the panel said.As SEBI’s chair and whole-time members are typically external hires and may already have investments, the panel has proposed that these should be liquidated or frozen before they join the regulator.
The panel also proposed that SEBI’s senior officers should publish the list of cases and matters in which they had to recuse themselves in the regulator’s annual report.