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Sebi tightens regulations to crack down on staff misbehaviour.

Sebi tightens regulations to crack down on staff misbehaviour.

The Securities and Exchange Board of India (SEBI) has announced new rules to curtail misconduct and corrupt practices among its employees. These regulations empower a competent authority to demand recovery from an employee for any financial losses incurred by SEBI due to their actions. This can be enforced through various legal means, including deducting the amount from the employee’s salary and other dues.

The revised framework extends to former employees who have resigned, retired, or completed their deputation tenure. The rules aim to bolster accountability within SEBI’s workforce and can be applied if an employee is suspected of acting improperly, engaging in corrupt practices, or misusing their authority for personal gain.

Furthermore, SEBI has stated that gratuity payments to employees could be withheld, either partially or entirely, during ongoing disciplinary proceedings. The disbursement of gratuity would occur post-proceedings, contingent upon the outcome of the disciplinary actions.

These measures underline SEBI’s commitment to upholding integrity and transparency within the capital markets, ensuring that employees adhere to the highest ethical standards.

In a previous instance, SEBI introduced its informal guidelines on the definition of an employee. Employee Stock Options (ESOPs) are widely used to reward, retain, and motivate employees. However, the requirement that ESOPs can only be allocated to employees can present challenges and limit its applicability.

In response to whether or not doctors who work part-time for a company while also engaging in private practice and earning other income should be considered employees and therefore eligible for ESOPs, SEBI determined that individuals are not required to work full-time for the company to be considered employees. Therefore, in the aforementioned scenario, doctors would be classified as employees and eligible for ESOPs.