New SEBI Guidelines Limit Employee Market Trades and Raise Gift Threshold

SEBI’s latest amendment to its employee service code, effective from July 13, introduces several safeguards to deter market manipulation. The broadened definition of “dependents” now incorporates adopted children, step‑children and financially dependent individuals, extending the reach of disclosure obligations.

A two‑year cooling‑off period is imposed on resigning or retiring staff, during which they are prohibited from representing any party in SEBI‑related matters, including investigations, hearings and settlements. Prospective job negotiations with outside firms must be reported within a month of initiation.

Employees are barred from initiating fresh investments in shares, equity‑linked instruments, and derivatives during their tenure. Allowed investments are limited to regulated collective vehicles, and the aggregate value of such holdings may not exceed 25% of an employee’s total portfolio, except for ESOPs granted to spouses and discretionary portfolio services.

The amendment also lifts the gift‑reporting exemption limit to INR 50,000, clarifying the categories of traditional and social gifts that can be accepted without formal reporting.