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REGD. No. D. L.-33004/99
The Gazette of India
CG-MH-E-11072026-274401
EXTRAORDINARY
PART III-Section 4
PUBLISHED BY AUTHORITY
No. 438] | NEW DELHI, TUESDAY, JULY 7, 2026/ASHADHA 16, 1948
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 7th July, 2026
SECURITIES AND EXCHANGE BOARD OF INDIA (EMPLOYEES' SERVICE)
(AMENDMENT) REGULATIONS, 2026
No. SEBI/LAD-NRO/GN/2026/311.— In exercise of the powers conferred by section 30
of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the
following regulations to further amend the Securities and Exchange Board of India (Employees'
Service) Regulations, 2001, namely: -
1. These regulations may be called the Securities and Exchange Board of India (Employees'
Service) (Amendment) Regulations, 2026.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Employees' Service) Regulations, 2001—
5082 GI/2026
(1)
2 | THE GAZETTE OF INDIA : EXTRAORDINARY | [PART III-SEC.4]
I. In regulation 3(1),
i. clause (f) shall be substituted with following, namely-
"(f) "Dependent" includes:
(i) "Dependent children" which means children of an employee who are eligible for
receiving medical or Leave Fare Concession benefit from SEBI;
(ii) "Substantially dependent" which means a person who is included in family of the
employee for receiving medical or Leave Fare Concession benefit from SEBI.
Explanation: For the purpose of this definition, a person who is otherwise not
dependent on the employee but is added in the Group Mediclaim Policy of SEBI as a
non-dependent for which the premium is borne separately by the employee shall not
be considered as 'substantially dependent'."
ii. clause (h) shall be substituted with following, namely-
"(h) "family members" means
(i) Spouse of the employee;
(ii) Dependent children of the employee, including Step children and Adopted
children;
(iii) Any person for whom the employee serves as legal guardian and substantially
dependent on such employee; and
(iv) Any other person related to by blood or marriage to the employee or his spouse,
and substantially dependent on such employee."
iii. after clause (h), the following new clause shall be inserted, namely-
"(ha) “Financial investment” means investment or deposit in any financial assets.”
iv. after clause (i), the following new clauses shall be inserted, namely
“(ia) “Non-permitted Investment” means investment that is not permitted to be made by an
employee during his period of service with the Board and shall mean the following: -
(i) Investment in equity;
(ii) Investment in any instrument convertible into equity; and
(iii) Investment or trading in derivatives of equity or commodity.
Explanation: It is clarified that the following investment shall not be included
within the definition of non-permitted investment, namely: -
(i) Investment through a pooled investment vehicle, if the scheme of such pooled
investment vehicle is professionally managed by an entity which is regulated by
any of the financial sector regulator; and
(ii) Investment in units of InVIT and REIT;
(ib) "OEC" means Office of Ethics and Compliance in SEBI.”
v. after clause (j), the following new clause shall be inserted, namely
"(ja) "Permitted investment" means any financial investment which is not a non-permitted
investment."
vi. after clause (k), the following new clauses shall be inserted, namely -
"(ka) "Professional interest" means any interest on account of employment or engagement
as advisor or consultant during the last three years with an entity not being employment or
engagement with the Central Government, State Government, Government or Statutory
Organization.
(kb) "Relational interest" means any interest on account of association as family member or
relative.
(kc) "Relative” means relative as defined under section 2(77) of the Companies Act 2013."
II. In regulation 54, the existing regulation shall be read as sub-regulation (1) of regulation 54 and
after the sub-regulation so re-numbered, the following new sub-regulation shall be inserted,
namely-
"(2) An employee shall disclose all negotiation or agreement for any future employment within
one month from the end of the month in which such negotiation or agreement takes place."
III. In regulation 55, after regulation 55(5), the following new sub-regulation shall be inserted,
namely
"(6) An employee leaving the service on account of retirement or resignation or otherwise shall
not appear before or against the Board on behalf of any other person in any matter or quasi-
judicial proceeding (including adjudication) or settlement or approval matter for a period of
two years from the date of being relieved from service."
IV. In regulation 62,
i. in sub-regulation (1),
a. after the words "Trivial gifts like", the words and symbols “mementos, souvenirs,
bouquets," shall be inserted;
b. the words "on the occasion of Diwali and New Year" shall be deleted.
c. the word "near" appearing in the Explanation shall be deleted.
ii. In sub-regulation (2),
a. after the words "the value of such gifts", the words “received from any one person"
shall be inserted;
b.the word and symbols “Rs. 10,000” shall be substituted with the word and symbols "Rs.
50,000".
V. Regulation 64 shall be substituted with the following, namely-
"Restrictions on investments
64. (1) An employee or his family members shall not make any fresh investment in
non-permitted investment, during the period of service of the employee with the
Board.
(2) Investment by an employee during the period of service with the Board, in products offered
by any one SEBI-regulated entity, which is professionally managing pooled investment
vehicle, shall not exceed 25% of his total acquisition cost of all the financial investments held
by him as on last day of the previous financial year or on the date of joining, whichever is
later."
VI. After regulation 64 and before regulation 65, the following new regulations shall be inserted,
namely-
"Relaxation from restriction on investment by family during the period of service of the
employee
64A. (1) Restriction in sub-regulation (1) of regulation 64 shall not be applicable where the
spouse of the employee acquires equity in employee stock options plan which is part of the
pay package of the spouse and to also disposal of such equity.
Explanation: In case of technical violations arising out of actions of spouse and/or dependent
family members, such an inadvertent action shall not be treated as misconduct by the
employee affecting his career progression. However, in appropriate cases, penalty imposed
may be in the nature of monetary penalty.
(2) Restriction in sub-regulation (1) of regulation 64 shall not be applicable where the family
members of the employee-
(i) use discretionary portfolio management services where the fund manager acts
independently to manage the investments; or
(ii) acquire or dispose unlisted security as part of the private business or investment
activity of such family member.
(3) Upon listing of unlisted security referred to in sub-regulation 2(ii) of this regulation, family
members of the employee may continue to hold them or dispose them or manage them through
discretionary portfolio management services (where the fund manager acts independently).
Options for the employee to deal with non-permitted investment held at the time of
joining
64B. (1) At the time of joining the Board, the employee may choose any of the followings
option(s) with respect to non-permitted investment held by him, namely: -
(i) Liquidate the non-permitted investment;
(ii) Freeze the non-permitted investment till the time of completion of his period of
service with the Board;
(iii) Disclose a trading plan to OEC for selling of these non-permitted investment
during his period of service in accordance with Regulation 5 of SEBI (Prohibition of
Insider Trading) Regulations, 2015; or
(iv) Sell the non-permitted investment during his period of service with the Board
without a trading plan but with prior approval of the OEC.
(2) With respect to investment in equity or instrument convertible into equity, of a commercial
venture (including unlisted companies) of the employee, he shall only have to choose from
option (i) or (ii) of sub-regulation (1).
(3) If non-permitted investments are not liquidated at the time of joining, -
(i) the employee shall not be allowed to exercise voting rights in respect of those equity
during the period of service with the Board; and
(ii) receipt of equity on account of corporate action or subscription to rights issue with
respect to such equity shall not be prohibited during the period of service with the Board.
(4) If an employee opts for trading plan, he must adhere to that trading plan and deviation
could only be with the prior approval.
(5) The prior approval required under this regulation shall be obtained from the OEC.
(6) Vested option with respect to equity may be exercised by an employee before joining the
Board and shall not be allowed to be exercised during the period of service with the Board.
(7) For the employees who were already in the service of the Board at the time of coming into
force of this amendment, options with respect to non-permitted investments, as detailed out
above shall be exercised within the timeline as may be specified.
(8) Family members of the employee are allowed to hold the non-permitted investment held by
them at the time of the employee joining the service of the Board; and are also allowed to
dispose them during the period of service of the employee with the Board.”
VII. Regulation 66 shall be substituted with the following, namely, -
“Disclosure of interests
66. (1) An employee shall make following disclosures (in the format as determined by
the competent authority), namely -
(i) details of his family members;
(ii) details of his relatives;
(iii) details of professional interests during the last three years;
(iv) details of immovable properties held by him and by his family members
acquired out of the money received from the employee or in which the
employee has an interest;
(v) details of financial investments and liabilities pertaining to him and to his
family members acquired out of the money received from the employee or in
which the employee has an interest;
(vi) details of non-permitted investments held by family members of employees
other than such investments acquired out of money received from the employee
or in which the employee has an interest; and
(vii) details of contract of renting out of immovable properties by him.
(2) The disclosures listed at sub-regulation (1) shall be made by the employee to OEC
at the time of his joining the services of the Board as well as at the time of exit from
the services.
(3) For the employees who were in the services of the Board at the time of coming into
force of this amendment, disclosure may be done within the timeline as may be
specified.
(4) Every change in details of family members or relatives, contract of renting out or
transactions in immovable property (purchase, sale, gift, inheritance) shall be disclosed
by the employee to the OEC within one month from the end of the month in which
such change takes place.
(5) An employee shall disclose every transaction in financial asset made by him and by
his family members acquired out of the money received from the employee or in
which the employee has an interest, during his period of service with the Board to the
OEC, if the value of such transaction is more than two times of his monthly basic pay,
within one month from the end of the month in which such transaction takes place.
(6) An employee shall disclose details as required under sub-regulation (1) with
respect to any person becoming his family member, during his period of service,
within one month from the end of the month in which such change takes place.
(7) Employees shall file disclosures listed at sub-regulation (1) as on the last day of the
previous financial year within the timeline as may be specified.
(8) Details of immovable properties disclosed by the employees in Grade F and
Executive Directors, shall be made public by the OEC in such manner as may be
prescribed from time to time.”
VIII. After regulation 66 and before regulation 67, the following new regulation shall be inserted,
namely-
"Recusal
66A. (1) An employee shall recuse himself from a matter specifically relating to a
person which falls within the scope of conflicted relationship.
Explanation: For the purpose of this regulation, the term ‘person' includes an entity or
an individual.
(2) Recusal shall mean all of the following -
(i) not present when the matter relating to such person comes up for discussion or
decision;
(ii) not having access to information relating to that matter;
(iii) not participating in discussion relating to that matter; and
(iv) any other manner as may be determined by the competent authority.
(3) Matter relating to a person would fall within the scope of conflicted relationship of
an employee, if -
(i) the matter is of a person in which any of the family member or relative of the
employee is employed as key managerial person or in Senior Management;
(ii) the matter involves any of the professional interest or relational interest of the
employee which may give rise to bias or perceived bias in handling such matter;
(iii) the matter involves a person who is or has been a close friend or close associate
during the last three years and is likely to give rise to bias or perceived bias in
handling such matter;
(iv) the employee has material interest in the matter in terms of investment made by
him in that person; or
(v) the employee has investment in products offered by a SEBI regulated entity
which is professionally managing pooled investment vehicle and the investment is
beyond the threshold of 25% prescribed in regulation 64(2), till the time the
investment with that entity falls below the threshold of 25%.
(4) An employee shall have material interest in a person if-
(i) he and his family member together have made non-permitted investment of more
than Rs. 20 Lakh (in terms of acquisition cost) in that person; or
(ii) his and his family members' non-permitted investment together in that person is
more than 5% of total acquisition cost of all the financial investments held by him
as on the last day of the immediate previous financial year, or on the date of joining,
whichever is later.
(5) For the removal of doubt it is clarified that a matter involving a class of entities or
making generic regulations shall not come within the scope of conflicted relationship.
(6) Whenever there is a doubt whether a matter involves conflicted relationship, the
issue may be referred to OEC or any other authority as may be specified.
(7) An employee shall disclose conflicted relationship at the earliest possible
opportunity.
(8) A digital system and recusal framework shall be put in place to record disclosure of
conflicted relationship as well as to record and process recusals.”
AMIT PRADHAN, Executive Director
[ADVT.-III/4/Exty./207/2026-27]
Note:
The Securities and Exchange Board of India (Employees' Service) Regulations, 2001, were
published in the Gazette of India on 6th September, 2001 vide S.O. No. 857(E) and were last
amended on September 08, 2025 by the Securities and Exchange Board of India (Employees'
Service) (Amendment) Regulations, 2025 vide notification no. SEBI/LAD-NRO/GN/2025/263.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.
KUMAR CHANDRA | Digitally signed by KUMAR CHANDRA
MEENA | Date: 2026.07.07 14:03:02 +05'30'
MEENA
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