In a bid to curb misconduct and corrupt practices among its employees, the Securities and Exchange Board of India (Sebi) has implemented stringent measures. The regulatory body has amended rules governing employee services, empowering a competent authority to demand recovery from an employee for any financial losses incurred by Sebi due to their actions.
Under the revised regulations announced on 6 May, Sebi clarified that the recovery could be enforced through various legal means, including deducting the amount from the employee’s salary and other dues.
Furthermore, this action can be taken if an employee is suspected of acting improperly, engaging in corrupt practices, or misusing their authority for personal gain.
The new framework extends to former employees who have resigned, retired, or completed their deputation tenure. Effective immediately, these rules aim to bolster accountability within Sebi’s workforce.
Additionally, Sebi 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 underscore Sebi’s commitment to upholding integrity and transparency within the capital markets, ensuring that employees adhere to the highest ethical standards.
Sometime back, SEBI introduced its informal guidelines on the definition of an employee. Employee Stock Options (ESOPs) are widely used ways to reward, retain and motivate employees. However, the requirement that ESOPs can only be allocated to employees can present challenges and limit its applicability.
Hence, SEBI was asked for ‘formal guidance’ regarding whether or not doctors who work part-time for a company while also engaging in private practice and earning other income be considered employees and therefore eligible for ESOPs.
In a favourable response, 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.
