Securities and Exchange Board of India (SEBI) classified investments allowed for board members, including chairperson, into permitted and non-permitted investments, in its now stricter Code of Conduct Rules for Board Members 2026.
The entirely new code was released on July 15, 2026 after the capital market watchdog said that the board made the announcement of the release after first quarter board meeting on June 19.
According to the new code, equity or convertible to equity instruments and derivatives fall under non-permitted investments. Investment through a regulated pooled investment vehicle like an SIP or SIF amongst others and buying units of InVIT and REITs are permitted investments, the market regulator said in the new code. This shall also not exceed 25% of the total acquisition cost of all the financial investments held by him as on the last day of the previous financial year or on the date of joining whichever is later. This ban is only on fresh investments.
The earlier code on conflict of interest in 2008, stopped at mandating disclosure of members’ and their families’ share ownership and other investments in listed, to-be-listed and regulated intermediaries of SEBI. Moreover, Whole Time Members will now come under the insider trading rules and will be considered a person with price sensitive information.
Further, SEBI also expanded the definition of family to include “spouse, dependent children (incl. step/adopted), legal wards, and blood/marriage relatives substantially dependent,” for Whole Time Members. This is significantly stricter than the 2008 rule which included just spouse and dependent children below age of 18. For part time members this has been left the same as spouse and dependent children.
SEBI members shall completely recuse themselves from cases where there is a conflict of interest and further expanded the definition of ‘conflict of interest,’ significantly tighter than in the 2008 regulation which mandated just disclosure before taking up the case
Such rules on conflict of interest also extends after retirement. SEBI also banned retired members from appearing before or against SEBI in cases or for approvals for of two years and any job negotiations by the members within one month from the end of the month in which such negotiation or agreement takes place.
SEBI’s new code comes after a High Level Committee on Conflict of Interest met and submitted its recommendations for the over haul, which followed allegations were made and later cleared, regarding conflicting investments of the previous Chairperson Madhabi Puri Buch.
Published - July 15, 2026 08:53 pm IST