A review prompted by the Buch controversy found that SEBI employees have long faced enforceable trading and disclosure obligations, while equivalent rules for the regulator’s board members remained largely voluntary.
SEBI’s long-running conflict-of-interest rules have exposed a striking inconsistency: the regulator has subjected its own employees to a detailed, enforceable regime for more than two decades, while the rules covering its board members were, until recently, little more than an internal promise. The gap matters because it goes to the heart of how a market watchdog polices itself, especially when questions of independence, trading restrictions and personal holdings can affect public trust.
According to Bar and Bench, SEBI staff have been bound since 2001 by the SEBI (Employees’ Service) Regulations, which prohibit speculative investing, treat employees as insiders and require annual declarations of assets. Those rules carry disciplinary consequences. By contrast, the 2008 code applying to SEBI members never had a clearly identified statutory foundation and, as the later committee would note, had not been tested in court. The result was a two-tier system in which employees faced hard obligations while the officials overseeing them did not face equivalent penalties.
The pressure to confront that imbalance intensified after the Buch controversy. SEBI’s board, at its meeting on 24 March 2025, its first under chairman Tuhin Kanta Pandey, formed a high-level committee under former Chief Vigilance Commissioner Pratyush Sinha to review conflicts of interest and disclosure rules for members and officials. SEBI’s own announcement named Injeti Srinivas as vice-chairman and included Uday Kotak, G. Mahalingam, Sarit Jafa and Professor R. Narayanaswamy as members. The panel submitted its report on 10 November 2025.
The committee’s findings were blunt. As SEBI disclosed, it said the 2008 code amounted to nothing more than a voluntary statement of expected conduct and imposed no penalty, unlike the employee regulations. It also noted that, since January 2018, the chairman and whole-time members had been filing immovable property returns in a format used by All India Service officers, and it highlighted informal trading restrictions that had been left to future boards to preserve or discard. But when the board discussed the report on 17 December 2025, it did not adopt the recommendations straight away. According to the account in Bar and Bench, some members questioned whether SEBI had the legal power to bind officials whose service conditions are set under central rules, while others raised privacy concerns over public disclosure of assets, leaving the matter unresolved for the time being.
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