New Delhi, Nov. 19 -- Company Outsider is a weekly newsletter by Sundeep Khanna. Subscribe to Mint's newsletters to get them directly in your email inbox.

For 33 years, the Securities and Exchange Board of India (Sebi) operated without a legally enforceable ethics code for its own people, even as it wielded the power to penalize market participants for far lesser infractions. So the question isn't whether its high-level committee's latest plan to replace the existing toothless voluntary code with a transparent, legally-binding framework for its senior leaders, is necessary. It's why that took so long.

The answer likely lies in an uncomfortable truth about India's regulatory culture: senior positions are often treated as earned privilege...