SEBI Revises Guidance Note On Insider Trading Norms
The SEBI building in Mumbai. (Source: BloombergQuint)

SEBI Revises Guidance Note On Insider Trading Norms

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Listed companies, intermediaries and fiduciaries who handle unpublished price-sensitive information are required to maintain a digital database of persons and entities with whom such details are shared, the Securities and Exchange Board of India has clarified.

The regulator on July 5 revised its guidance note on insider trading norms to provide clarity on requirement of maintaining structured digital database of persons and entities with whom UPSI is shared, and the scope of investment company, according to a circular released by the market regulator on Monday.

The regulator released the guidance note to remove certain difficulties in the interpretation or application of the provisions of the insider trading norms.

According to the revised guidance, the requirement to maintain structured digital database, containing the names of such persons or entities with whom UPSI is shared, is applicable to listed companies, intermediaries and fiduciaries who handle UPSI of a listed company in the course of business operations.

SEBI also clarified that the term ‘investment company’ intends to include only those non-individual corporate promoters of intermediaries or fiduciaries as designated person, whose main object or principal activity, is investing in securities of other companies, the SEBI said.

The regulator had first issued a guidance note on Prohibition of Insider Trading norms on Aug. 24, 2015, to bring clarity in the interpretation or application of the provisions of PIT.

The guidance note was subsequently amended on Feb. 17, 2016.

“...the guidance note has been revised on July 5 to provide clarity on requirement of maintaining structured digital database and scope of investment company,” the watchdog said on Monday.

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