SEBI has introduced the Securities and Exchange Board of India (Employees’ Service) (Second Amendment) Regulations, 2024, aiming to enhance accountability among its employees and strengthen its mechanisms for dealing with alleged misconduct.
One significant amendment lies within Regulation 79, where a proviso is added, explicitly stating that the Competent Authority retains the power to recover pecuniary losses caused to the Board from former employees, utilizing all available legal means. This includes the recovery of losses from amounts due to the employee from the Board, ensuring that accountability remains intact irrespective of the employee’s employment status.
Moreover, the introduction of Explanation 2 under the same regulation clarifies that any proceedings initiated against an employee during their tenure with SEBI will continue even after their retirement or repatriation, ensuring that no individual escapes accountability by leaving the service.
Regulation 87A is another pivotal addition, addressing allegations of corrupt practices against former employees. It outlines a structured procedure approved by the Competent Authority to investigate such allegations, defining ‘corrupt practices’ as per the Prevention of Corruption Act, 1988. This regulation underscores SEBI’s unwavering commitment to uphold ethical standards and integrity within its workforce, regardless of employment status.
Furthermore, Regulation 93 introduces provisions to withhold gratuity payments during the pendency of proceedings initiated against an employee under specified regulations. This temporary withholding ensures that any potential liabilities or recoveries arising from the proceedings can be effectively addressed before disbursing the gratuity.
These amendments signify SEBI’s proactive approach towards reinforcing accountability, transparency, and ethical conduct within its workforce. By extending the regulatory purview to cover former employees and instituting measures to address alleged misconduct comprehensively, SEBI sets a precedent for regulatory bodies worldwide.
However, while these regulations bolster SEBI’s regulatory framework, their effective implementation remains crucial. SEBI must ensure that the mechanisms for investigating allegations and enforcing disciplinary actions are transparent, fair, and impartial. Additionally, adequate training and awareness programs should be provided to employees to foster a culture of compliance and ethical behavior from within.
