Background
Pratyush Sinha Committee on SEBI Conflict of Interest Reform: The Pratyush Sinha Committee was set up by the Securities and Exchange Board of India (SEBI) as a High-Level Committee to strengthen its conflict-of-interest and disclosure framework. This step followed rising concerns about transparency at senior levels of the regulatory body.
Static GK fact: SEBI was established in 1992 as India’s principal regulator for the securities market.
Need for Reform
SEBI officials below the top management are bound by strict rules under employee regulations, but senior leadership had lighter, largely voluntary disclosure norms. The committee aimed to remove this gap and bring all officials under a uniform system of accountability.
Mandatory Disclosure
One of the major recommendations is compulsory asset and liability disclosures by the Chairperson, Whole-Time Members (WTMs), and senior officers of SEBI.
Annual, event-based and exit disclosures covering financial holdings, trading activity, and professional relationships are required for all officials, including board members.
Static GK tip: Similar disclosure norms exist for senior officials of the Reserve Bank of India.
Insider Classification and Investment Rules
The committee recommended that SEBI’s top leadership be formally treated as “insiders” under insider-trading regulations.
To prevent misuse of sensitive information, senior officials and their dependent family members may invest only through pooled, professionally-managed funds.
Personal stock-picking, speculative activity or direct market participation is restricted, and existing investments must either be exited or placed under an approved compliance plan.
Ethics Oversight and Governance Mechanisms
The committee suggested creating a dedicated Office of Ethics & Compliance (OEC) supported by an Oversight Committee to enforce rules consistently.
It also proposed a centralised digital registry for disclosures, a structured recusal-reporting system, and stricter rules on gifts and external engagements.
Whistleblower Channel
A secure whistleblower channel for conflict-of-interest reporting was recommended to ensure anonymity and protection.
This channel allows employees and stakeholders to report financial or ethical misconduct without fear of retaliation.
Post-Retirement Restrictions
The committee suggested a two-year cooling-off period for former SEBI officials before they can appear before or against SEBI in any regulatory matter.
This aligns SEBI with global best practices followed by major regulatory institutions.
Significance
The recommendations aim to bring SEBI’s governance in line with international financial regulators by creating a transparent, enforceable and technology-supported ethics system.
The reforms help improve market integrity, reduce risks of insider influence, and build investor confidence.
Static GK fact: The U.S. SEC and the UK FCA have similar mandatory disclosure and cooling-off systems for officials.
Static Usthadian Current Affairs Table
Pratyush Sinha Committee on SEBI Conflict of Interest Reform:
| Topic | Detail |
| Committee Name | High-Level Committee chaired by Pratyush Sinha |
| Purpose | Strengthen SEBI’s conflict-of-interest and disclosure framework |
| Key Focus | Transparency, ethics oversight, insider-trading compliance |
| Disclosure Norms | Mandatory asset and liability reporting for top officials |
| Insider Classification | Top leadership to be treated as “insiders” |
| Investment Rules | Only pooled, professionally-managed funds allowed |
| Ethics Oversight | Office of Ethics & Compliance and oversight committee suggested |
| Whistleblower System | Secure channel for conflict-of-interest reporting |
| Cooling-Off Period | Two-year post-retirement restriction for officials |
| Static GK Note | SEBI established in 1992 as India’s securities regulator |
