Sebi imposes stringent measures to address misconduct among its staff

Amended Employees Service Regulation to include recovery of monetary loss, whole-time members and the chairperson are not covered

The Securities and Exchange Board of India (Sebi) has come out with stringent measures to deal with misconduct and corrupt practices by its staffers.

In a notification dated May 6, the markets regulator has amended the Sebi (Employees’ Service) Regulation and the new norms have been made effective from the same date.

As per the amendment, a competent authority will be able to “direct recovery from an employee of the amount of pecuniary loss caused to the board”. This amount could be from the pay and other amounts due to the employee.

The action may follow if an employee is alleged to have acted for improper purpose, in a corrupt manner, or exercised their powers with an improper motive.

Employees, who have left the services, retired or resigned from the board, will also fall under the provisions.

“The gratuity payable to an employee may be withheld either in full or part, during the pendency of any proceedings initiated against an employee,” said the notification.

The gratuity will be paid only on the conclusion of the proceedings, subject to conditions.

Legal experts said that the provisions of the Employees’ Service Regulation are applicable to officials and employees till the Executive Director (ED) level.

Thus, whole-time members and the chairperson are not covered by the same.

Some others are of the opinion that the need for such stringent measures stem from the recent alleged malpractices witnessed at the level of market infrastructure institutions (MIIs) where the regulator had passed orders against the key management.