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19 Dec 2025·Source: The Indian Express
2 min
Polity & GovernanceEconomyPolity & GovernanceNEWS

SEBI Bill Proposes Larger Board and Stricter Conflict of Interest Rules

A new Bill aims to expand SEBI's board and tighten conflict of interest norms.

SEBI Bill Proposes Larger Board and Stricter Conflict of Interest Rules

Photo by Frank Ching

The government has introduced a new Bill in the Lok Sabha to amend the SEBI Act, 1992, proposing significant changes to the market regulator's structure and functioning. The key proposals include increasing the SEBI board's size from nine to seven-ten members, introducing stricter conflict of interest safeguards for board members and employees, and allowing SEBI to regulate new financial products like carbon credits. This move aims to enhance governance, transparency, and investor protection in India's capital markets, crucial for maintaining market integrity and attracting investment.

मुख्य तथ्य

1.

Bill introduced in Lok Sabha to amend SEBI Act, 1992

2.

Proposed increase in SEBI board size from nine to seven-ten members

3.

Stricter conflict of interest safeguards for board members and employees

4.

SEBI to regulate new financial products like carbon credits

UPSC परीक्षा के दृष्टिकोण

1.

Role and functions of statutory bodies (SEBI)

2.

Legislative process for amending Acts

3.

Capital market regulation and investor protection

4.

Corporate governance and conflict of interest in regulatory bodies

5.

Emerging financial products (e.g., carbon credits) and their regulation

6.

Impact of regulatory changes on economic growth and investment

दृश्य सामग्री

Legislative Process for an Ordinary Bill in India (SEBI Amendment Bill Example)

This flowchart illustrates the typical journey of an Ordinary Bill, such as the proposed SEBI Amendment Bill, through the Indian Parliament to become an Act. Understanding this process is crucial for comprehending how legal changes are enacted.

  1. 1.Introduction of Bill (Lok Sabha or Rajya Sabha)
  2. 2.First Reading: Introduction & Publication in Gazette
  3. 3.Second Reading: General Discussion
  4. 4.Reference to Parliamentary Standing Committee (Optional but common)
  5. 5.Committee Report & Clause-by-Clause Consideration
  6. 6.Third Reading: Voting on the Bill as a whole
  7. 7.Bill Passed by First House
  8. 8.Transmission to Second House
  9. 9.Second House Considers & Passes Bill (with/without amendments)
  10. 10.Disagreement between Houses?
  11. 11.President Summons Joint Sitting (Article 108)
  12. 12.Bill Passed by Both Houses (or Joint Sitting)
  13. 13.President's Assent (Article 111)
  14. 14.Bill Becomes an Act (Published in Gazette)

Key Proposed Amendments to SEBI Act, 1992 (December 2025)

This dashboard summarizes the critical changes proposed in the new Bill to amend the SEBI Act, 1992, highlighting the government's focus on enhancing governance and expanding regulatory scope.

SEBI Board Size
7-10 membersFrom 9 members

Proposed increase aims to bring diverse expertise and perspectives to SEBI's decision-making, enhancing its effectiveness as a market regulator.

Conflict of Interest Rules
Stricter SafeguardsEnhanced

New provisions target board members and employees to ensure impartiality and prevent undue influence, crucial for maintaining market integrity and investor trust.

New Regulatory Scope
Carbon CreditsNew Inclusion

Empowering SEBI to regulate carbon credit markets positions India at the forefront of green finance, ensuring transparency and investor protection in this emerging asset class.

Overall Objective
Enhanced Governance & Investor ProtectionStrengthened

The amendments collectively aim to fortify India's capital markets against risks, promote fair practices, and attract both domestic and foreign investment.

और जानकारी

पृष्ठभूमि

The Securities and Exchange Board of India (SEBI) was established in 1988 as a non-statutory body and granted statutory status on January 30, 1992, through the SEBI Act, 1992. Its primary objective is to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Over the years, SEBI's powers and scope have been expanded to keep pace with the evolving financial landscape, including regulating new market instruments and ensuring market integrity.

नवीनतम घटनाक्रम

A new Bill has been introduced in the Lok Sabha to amend the SEBI Act, 1992. Key proposals include increasing the SEBI board's size from nine to seven-ten members, implementing stricter conflict of interest safeguards for board members and employees, and empowering SEBI to regulate new financial products like carbon credits. These amendments aim to bolster governance, transparency, and investor protection, which are crucial for maintaining confidence in India's capital markets and attracting both domestic and foreign investment.

बहुविकल्पीय प्रश्न (MCQ)

1. With reference to the Securities and Exchange Board of India (SEBI) and the proposed amendments to the SEBI Act, 1992, consider the following statements: 1. SEBI was established as a statutory body in 1988 to regulate the securities market. 2. The proposed Bill aims to increase the maximum strength of the SEBI board to ten members, including the Chairman. 3. SEBI currently possesses quasi-judicial powers to issue directions, conduct investigations, and impose penalties. 4. The new Bill explicitly empowers SEBI to regulate carbon credits as a financial product. Which of the statements given above are correct?

उत्तर देखें

सही उत्तर: B

Statement 1 is incorrect. SEBI was established in 1988 as a non-statutory body and was granted statutory status through the SEBI Act, 1992. Statement 2 is correct as the Bill proposes increasing the board size from nine to seven-ten members. Statement 3 is correct; SEBI has significant quasi-judicial powers. Statement 4 is correct as the new Bill aims to allow SEBI to regulate new financial products like carbon credits. Therefore, statements 2, 3, and 4 are correct.

2. The recent Bill to amend the SEBI Act, 1992, proposes stricter conflict of interest safeguards for board members and employees. In the context of regulatory bodies in India, which of the following statements best describes the rationale behind such safeguards?

उत्तर देखें

सही उत्तर: B

The primary rationale for stricter conflict of interest safeguards in regulatory bodies is to ensure impartiality, prevent undue influence of personal financial interests on official decisions, and maintain public trust in the integrity of the regulatory process. Option A is incorrect as regulatory bodies serve broader market and investor interests, not just fiscal policy. Option C is incorrect as regulatory bodies are not typically involved in market operations. Option D is incorrect as safeguards increase, rather than reduce, scrutiny.

3. Consider the following statements regarding the regulation of financial markets in India: 1. The Reserve Bank of India (RBI) is the sole regulator for all financial products, including derivatives and carbon credits. 2. The Securities and Exchange Board of India (SEBI) primarily regulates the capital market, while the Insurance Regulatory and Development Authority of India (IRDAI) regulates the insurance sector. 3. The proposed amendments to the SEBI Act, 1992, would allow SEBI to regulate 'carbon credits' as a new financial product, thereby expanding its jurisdiction. Which of the statements given above is/are correct?

उत्तर देखें

सही उत्तर: B

Statement 1 is incorrect. India has multiple financial regulators (RBI, SEBI, IRDAI, PFRDA), each with specific jurisdictions. RBI is not the sole regulator for all financial products. Statement 2 is correct, outlining the distinct roles of SEBI and IRDAI. Statement 3 is correct, as the news explicitly mentions the proposal to empower SEBI to regulate carbon credits, expanding its regulatory scope. Therefore, statements 2 and 3 are correct.

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