SEBI, on 6th May, 2024, with an aim to enhance regulatory oversight and disciplinary measures within SEBI’s employee framework, exercised its authority under Section 30 of the Securities and Exchange Board of India Act, 1992 by amending the Securities and Exchange Board of India (Employees’ Service) Regulations, 2001 and enacting the Securities and Exchange Board of India (Employees’ Service) (Second Amendment) Regulations, 2024; effective from publication in the Official Gazette on May 6, 2024.
Key Amendments
1. Recovery of Monetary Loss (Regulation 79(2)):
A proviso to Regulation 79(2) has been inserted, granting the Competent Authority the power to recover monetary losses caused to the Board by an employee, limited to the actual loss suffered. Such recovery may be made by all lawful means available to the Board but only to the extent of the loss suffered. The Board is prohibited from recovering any amount beyond the extent of the loss suffered.
2. Continuation of Proceedings (Regulation 79):
An explanation has been added to Regulation 79 which states that proceedings initiated against an employee during their tenure continue even after his service ceases. These proceedings are concluded by the initiating authority in the same manner as if the employee were still in service.
3. Action against Former Employees (Regulation 87A):
A new Regulation 87A introduces provisions for taking actions against employees who have left the services of the Board along-with an accompanying explanation stating that the allegation shall be deemed to indicate the corrupt practice where the employee is alleged of corrupt practice, including criminal misconduct under Section 13 of the Prevention of Corruption Act, 1988, or improper exercise of powers with a corrupt motive.
4. Withholding Gratuity (Sub-regulation 93(4)):
Sub-regulation 93(4) has been added which allows withholding of gratuity payments if proceedings are pending against an employee, and that the same shall be contingent upon the outcome of these proceedings.
These reforms mark a proactive step by SEBI to strengthen governance and accountability across its organizational structure
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