Ami Sheth
SEBI has issued a notification dated 17th July, 2020 on Amendment to SEBI (Prohibition of Insider Trading) Regulations, 2015 effective from aforesaid date. We give below a summary of the major amendments, for your information:
I. Structured Digital Database (SDD)
Regulation 3 (5) (Communication or procurement of unpublished price sensitive information)has been substituted.
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Before Amendment |
After Amendment |
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The Board of Directors were mandatorily required to maintain SDD |
The Board of Directors can assign responsibility of maintaining SDD to Head(s) of the organisation of every person required to handle unpublished price sensitive information (UPSI) |
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SDD required name of person with whom information is shared and sent, detail of PAN or other Identity proof of such person |
Now, additionally nature of UPSI and name of person who shared UPSI is also required to be added in SDD |
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SDD could be outsourced |
Now, there is a prohibition for outsourcing the work relating to maintaining SDD. It shall be maintained internally. |
II. Period of maintaining SDD
In Regulation 3, sub-regulation 6 has been inserted.
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Before Amendment |
After Amendment |
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There was no time limit mentioned for preserving SDD |
Now, it is compulsory to preserve information of SDD for minimum 8 years after completion of relevant transaction |
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If there is any investigation by SEBI, SDD information is required to be maintained or preserved till completion of investigation or proceedings of SEBI |
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III. Amendments to Schedule B (Minimum Standard for Code of Conduct for Listed Companies to Regulate, Monitor and Report Trading by Designated Person)
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Clauses of schedule B |
Before Amendment |
After Amendment |
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4 (3)(b) |
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Trading window restrictions will not be applicable to transactions which are undertaken through such other mechanism as may be specified by the Board from time to time |
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12 |
No such requirement |
Now, it is compulsory for the company to transfer funds/ penalty collected from any disciplinary action to be remitted to SEBI for transferring to IPEF* |
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13 |
On violation of PIT Regulations, Company was immediately required to inform SEBI. |
Now, on violation of PIT Regulations, Company is required to immediately inform Stock exchanges. |
IV. Amendments to Schedule C (Minimum Standards for Code of Conduct for Intermediaries and Fiduciaries to Regulate, Monitor and Report Trading by Designated Persons)
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Clauses of schedule C |
Before Amendment |
After Amendment |
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10 |
No such requirement |
Now, fine /penalty for contravention of code of conduct shall be remitted to SEBI for crediting to IPEF* |
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11 |
On violation of PIT Regulations, intermediary or fiduciary was immediately required to inform SEBI. |
Now, on violation of PIT Regulations, intermediary or fiduciary is required to immediately inform Stock exchanges. |
*IPEF- Investors Protection & Education Fund established by SEBI.
In furtherance to the aforesaid matter SEBI has issued a circular dated 23rd July, 2020 providing format of intimation to stock exchange and account details for transferring funds to SEBI.
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