SEBI's Insider Trading Regulation
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Strengthening Market Integrity Through Regulatory Oversight
The Securities and Exchange Board of India (SEBI) continues to refine its Prohibition of Insider Trading (PIT) regulations. Maintaining strict compliance standards is necessary for corporate promoters, designated persons, and institutional investors. At SP RESEARCHVIA PVT. LTD., we summarize the key elements of the updated compliance rules.
What are the primary updates in SEBI's insider trading compliance code?
The updates tighten the definitions of Unpublished Price Sensitive Information (UPSI), mandate digital database systems (Structured Digital Databases) for tracking information sharing, and enforce automated trading window closures during quarterly results preparation.
Structured Digital Databases (SDD)
Listed entities must maintain an SDD containing the names and PANs of persons with whom UPSI is shared. This digital trail ensures accountability and assists regulators in auditing suspicious trading activities ahead of corporate announcements.
Trading Window Closures and Pre-Clearance
Designated persons are prohibited from trading in the company's shares during window closure periods, typically starting from the end of each quarter until 48 hours after financial results are disclosed. Any trade above specified thresholds during open periods requires prior approval from the compliance officer.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
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