Insider Trading Disclosure Protocols

On June 25, 2024, the Securities and Exchange Board of India (SEBI) announced the #SEBI (Prohibition of Insider Trading) (Second Amendment) Regulations, 2024. These amendments modify the SEBI (Prohibition of Insider Trading) Regulations, 2015, and will come into effect on September 23, 2024. The changes aim to simplify the trading plan framework and provide more flexibility for insiders, such as directors and key managerial personnel, who regularly possess unpublished price-sensitive information (#UPSI). Key Amendments 1. Cool-Off Period and Coverage Period Changes   - The cool-off period for starting trades after public disclosure of the trading plan is reduced from six months to 120 calendar days.   - A minimum 12-month trading plan is no longer mandatory. Insiders can now specify their trading period, with an outer time limit required. 2. Price Limit Introduction   - Insiders can set an upper price limit for buy trades and a lower price limit for sell trades, within 20% of the closing price on the day before the trading plan submission.   - Trades cannot be executed if the security price is outside these limits, protecting insiders from unexpected price movements. Non-Implementation Flexibility Insiders can now deviate from the trading plan due to permanent incapacity, bankruptcy, or legal reasons. If unable to execute the trading plan due to price limits or inadequate liquidity, the following procedures apply:   - Notify the compliance officer within two days of the trading plan's end with reasons and evidence.   - The compliance officer will present this information to the audit committee, which will decide on the legitimacy of the non-implementation.   - The compliance officer will report the audit committee’s decision to the stock exchanges on the same day.   - If the audit committee rejects the insider’s submission, the compliance officer will take appropriate action as per the code of conduct. Additional Amendments - Insiders can adjust their trading plans for corporate actions like bonus issues or stock splits, with compliance officer approval and notification to stock exchanges. - Contra trades are no longer allowed under an approved trading plan, and a six-month restriction on such trades applies without exceptions. - The compliance officer must approve or reject trading plans within two trading days and notify the stock exchanges on the day of approval. Implications The amendments aim to make the trading plan framework more user-friendly and less rigid, encouraging more insiders to use it. By allowing price limits and flexibility in non-implementation, SEBI aims to protect insiders from market volatility while maintaining strict adherence to insider trading regulations. #SEBI #SEBIupdates #Traders #Amendments https://lnkd.in/dFFZ_Wuc

Expanded UPSI and SDD Compliance The Securities and Exchange Board of India (SEBI) has notified the Prohibition of Insider Trading (Amendment) Regulations, 2025 , dated March 11, 2025 , and set to take effect 90 days from the date of publication in official gazette. These amendment regulations expand the scope of Unpublished Price Sensitive Information (UPSI) to enhance market transparency and compliance. 🔷 What’s New? A. Expanded Definition of UPSI SEBI has broadened the scope of UPSI to include: Award or termination of contracts outside the normal course of business. Resignation of Statutory or Secretarial Auditors. Change in company ratings (excluding ESG ratings). Fundraising plans. Agreements affecting management or control. Fraud, defaults, or arrests of promoters, directors, or key managerial personnel. Resolution plans, insolvency proceedings, or winding-up petitions. Forensic audits and regulatory actions affecting the company. Major litigations or disputes impacting the company. Guarantees or indemnities given by the company outside the normal course of business. Suspension or cancellation of key licenses or regulatory approvals. B. Strengthened Structured Digital Database (SDD) Compliance 📌 Companies must record insider trading-related information received from external sources in their structured digital database within two calendar days to ensure better tracking and compliance. C. Trading Window Relaxation 📌 For UPSI originating from external sources, trading windows may not be closed.

Outcome of SEBI Board Meeting dated 30 September, 2024: Prohibition of Insider Trading Regulations related: - Expansion of the definition of connected persons to include a firm or its partner or employee where a “connected person” is also a partner, as well as individuals sharing a household or residence with a “connected person.” - The provisions related to connected persons will now apply to “relatives” rather than just “immediate relatives” - Insertion of a new definition “relative” to include the spouse, parents (including parents of the spouse), siblings (including siblings of the spouse), and children (including children of the spouse), along with their spouse LODR related - Introduction of single filing system for listed entities to file relevant reports, documents etc. on one exchange which will be automatically disseminated at the other exchange - Filings integrated into two broad categories viz., Integrated Filing (Governance) and Integrated Filing (Financial) - System driven disclosure of shareholding pattern and revision in credit ratings by Stock Exchanges - Detailed advertisement of financial results in newspapers would be optional for listed entities - Additional time of 3 months to fill up vacancies in Board and KMP positions at listed entities coming out of the CIRP - Increased time of 3 hours instead of 30 mins for outcome of board meeting that concludes after trading hours - Additional time (72 hours instead of 24 hours) for disclosure of legal disputes subject to maintaining such information in SDD - Disclosure of tax litigations and tax disputes on the basis of materiality. - Disclosure of fines / penalties imposed on the basis of new materiality threshold Rs. 1 lakh for sector regulators / enforcement agencies and Rs. 10 lakhs for other authorities) as against the present requirement to disclose all fines and penalties ICDR related - Faster Rights Issue: to be completed within 23 working days v/s present average timelines of 317 days. Requirement of filing Draft letter of offer (only issue related incremental information) with SEBI discontinued. Mandatory appointment of merchant banker made optional. - Pre-issue and price band advertisement will be merged into a single advertisement - Issuers can voluntarily disclose proforma financials for acquisitions or divestments already undertaken or proposed from issue proceeds in case of public issue, rights issue and QIPs - Issuers with outstanding SARS granted to employees, which are fully exercised for equity shares before filing the RHP are allowed to file the DRHP #SEBI #Boardmeeting #outcome #insidertrading #ICDR #LODR

SEBI has made significant amendments to the Prohibition of Insider Trading (PIT) Regulations, 2015, expanding the definition of Unpublished Price Sensitive Information (UPSI) to ensure better compliance and transparency. Previously, companies primarily considered only a limited set of events as UPSI. To address this, SEBI has now added 16 new categories to the list, making insider trading regulations more comprehensive. These changes will be effective from June 9, 2025. Key amendments include: The following events/information will now be considered UPSI: - Award or termination of contracts not in the normal course of business - ⁠Changes in key managerial personnel (except due to superannuation or end of term) and resignations of Statutory/Secretarial Auditors - ⁠Change in ratings (excluding ESG ratings) - ⁠Fundraising plans - ⁠Agreements affecting management/control of the company - ⁠Fraud or defaults by the company, its promoters, directors, key personnel, or subsidiaries - ⁠Resolution plans, restructuring, or one-time loan settlements - ⁠Admission of winding-up petitions or insolvency applications under IBC, 2016 - ⁠Initiation of forensic audits and receipt of final forensic audit reports - ⁠Regulatory, statutory, or enforcement actions/orders (domestic or international) - ⁠Outcomes of litigation/disputes that impact the company - ⁠Guarantees, indemnities, or sureties provided outside the normal course of business - ⁠Granting, withdrawal, or suspension of key licenses/regulatory approvals Additionally, SEBI now mandates that any UPSI received from external sources must be recorded in the Structured Digital Database (SDD) within two calendar days. In my view, these amendments aim to enhance corporate governance, ensuring that all material information impacting stock prices is transparently disclosed. What are your thoughts on these changes? Feel free to discuss in the comments! #SEBI #regulatoryupdates #securities #insidertrading #UPSI