India market regulator tightens ethics rules for staff

The market regulator in India has formally approved more stringent conflict-of-interest regulations for its staff, mandating that top-tier officials either liquidate or freeze their personal equity holdings upon entering service. These officials must also refrain from all trading activities throughout the duration of their employment.

The Securities and Exchange Board of India (SEBI) reached this decision following recommendations from a specialized panel which suggested sweeping changes in November 2025. This panel was established to review internal investment protocols after former chief Madhabi Puri Buch faced allegations from Hindenburg Research regarding links to the Adani group. Both Buch and the Adani group have denied any wrongdoing. The new changes will take effect once they are officially notified by the federal government.

Under the newly approved framework, officials across the top four levels of the organization, including the chairperson, are required to disclose comprehensive details of their immovable properties. This alignment with federal government standards ensures that assets are declared at the time of joining and whenever a sale or acquisition occurs.

Furthermore, the SEBI board has directed officials to recuse themselves from any matters where they hold a material financial interest. To facilitate this, a digital recusal system will be implemented. The board noted that privacy concerns raised by staff members were considered during the revision process.

In a separate move to streamline market operations, the regulator eased transaction settlement rules for significant foreign investors. These entities are now permitted to settle trades on a net basis, replacing the previous requirement for individual transaction settlements. This change is expected to reduce funding requirements and lower overall trading costs.