The Securities and Exchange Board of India (Sebi) has notified changes to its employee service regulations, sharpening conflict-of-interest norms, tightening investment curbs and widening disclosure requirements under the Sebi (Employee Service) (Amendment) Regulations, 2026.
A two-year cooling-off period has been introduced during which former employees cannot represent clients before the regulator in proceedings, settlements or approval matters. Employees must also disclose any job negotiations within a month of such engagement.
The definitions of family and dependent have been expanded to include adopted and stepchildren, as well as individuals who are substantially dependent on employees, thereby broadening compliance obligations in areas such as investments and disclosures.
Investment Curbs And Gift Rules Tightened
The amendment introduces a clear distinction between prohibited and permissible investments. Employees are now barred from investing directly in equities, equity-convertible instruments, and derivatives.
Investments through regulated pooled vehicles such as mutual funds and real estate investment trusts remain exempt. Exposure to certain regulated investment products is capped at 25 per cent of an employee's total investments, with limited exemptions for employee stock options granted to spouses and discretionary portfolio management services.
Gift disclosure rules have also been revised, with the threshold raised from Rs 10,000 to Rs 50,000. Acceptable customary exchanges have been clarified. |
