A high-level committee led by former chief vigilance commissioner Pratyush Sinha has proposed sweeping reforms to strengthen conflict-of-interest and disclosure norms for the Securities and Exchange Board of India (Sebi), including mandatory asset and liability declarations by the chairperson and senior officials.

The panel, constituted after allegations of conflict of interest against former Sebi chief Madhabi Puri Buch, has recommended replacing the current voluntary code with a legally enforceable framework. It noted that the existing system lacks uniformity, legal backing and public accountability compared with global standards.

The panel feels all Sebi board members and employees should be required to submit initial, annual, event-based and exit disclosures covering assets, liabilities, trading activities and relevant family or personal relationships. These filings would be overseen by a newly created Office of Ethics and Compliance.

Asset and liability statements of the chairperson, whole-time members (WTMs), and senior officials at the level of chief general manager and above would be made public. The panel further recommended extending investment and trading restrictions currently applicable to employees to the chairperson and WTMs as well, who would also be treated as “insiders” under Sebi’s insider trading rules.

At the time of joining, the chairperson and WTMs would have the option to liquidate, freeze or divest their investments — either through a pre-approved trading plan or with prior approval.

The definitions of “family” and “relatives” have been widened to include spouses, dependent children and other dependents, while potential conflicts from close friends and professional relationships would also need to be disclosed.

Acceptance of gifts by the chairperson and WTMs would be prohibited, except for nominal items received at public events. The panel also called for a comprehensive recusal framework and a secure, confidential whistleblower mechanism for both internal and external stakeholders.

To bolster oversight, the report recommends using artificial intelligence and data analytics to monitor and flag potential conflicts of interest.

If implemented, the new rules would align Sebi with global peers such as the US Securities and Exchange Commission, whose officials publicly disclose their assets, liabilities and transactions annually.