The Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2026, notified on 7 July 2026, amend the Securities and Exchange Board of India (Employees’ Service) Regulations, 2001 and come into force on publication in the Official Gazette. The amendments revise definitions including “dependent”, “family members”, “financial investment”, “non-permitted investment”, “permitted investment”, “professional interest”, “relational interest”, “relative”, and “OEC”. They require employees to disclose negotiations or agreements for future employment within one month, prohibit employees leaving SEBI from appearing before or against the Board in specified matters for two years, revise gift-related provisions including increasing the reporting threshold from Rs. 10,000 to Rs. 50,000, introduce restrictions on investments by employees and related relaxations, prescribe options for dealing with non-permitted investments held at the time of joining, expand disclosure requirements relating to family members, relatives, interests, investments, liabilities and immovable property, and introduce a recusal framework requiring employees to recuse themselves from matters involving conflicted relationships, with provisions for disclosure, recording and processing of recusals.
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—
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 services 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.
