New Delhi: SEBI is planning a new set of rules to avoid conflict of interest among its officials after several recent cases raised doubts about the independence of market decisions.
A conflict of interest occurs when a person in authority could potentially benefit personally from the decision they are making. For instance, if an officer owns shares in a company they are investigating, it then turns into a conflict.
SEBI aims to avoid such situations altogether. Under the new regulations, officers are likely to be barred from investing in certain companies or sectors. Officers may also have to declare financial interests periodically and recuse themselves from cases where even a remote possibility of conflict of interest could arise.
Experts say these rules are important because SEBI controls India’s entire stock market. Its decisions affect crores of investors. If the decision-makers are not fully neutral, public trust can be damaged.
Some SEBI officers feel that rules are becoming too strict, but most of the investors believe stronger rules will actually improve confidence.
