SEBI's controversial 'fit and proper' rule faces suspension
SEBI has suspended enforcement of its 2021 rule pending review—a rule that automatically disqualifies directors and top shareholders from financial firms if they're just charged (not convicted) with economic crimes.
This "fit and proper person" clause was meant to clean up the industry, but now it's under review.
Push for rules that protect investors but also give fair shot
Big brokerages like Motilal Oswal and Anand Rathi say this rule is unfair and disrupts businesses, since even an accusation could end careers.
Unlike SEBI, other regulators like RBI and IRDAI only act after a conviction or review each case individually.
With enforcement currently suspended pending the ongoing court case, which is next scheduled for January 2026, there's a push for rules that protect investors but also give everyone a fair shot—more in line with global standards.