System driven disclosures under Reg. 7(2) of SEBI (PIT) Regulations, 2015

Overview

Securities and Exchange Board of India (SEBI) vide notification / Circular No. SEBI/HO/ISD/ISD/CIR/P/2020/168 issued and publish dated 09th September, 2020, has published - Automation of Continual Disclosures under Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 - System driven disclosures.” in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with regulations 4(3) and 11 of the PIT Regulations.

Purpose behind this notification

To protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

The Circular is issued to:

• All Listed Companies
• All Depositories
• All Nationwide Stock Exchanges

Previous circulars reference:

1. SEBI has further amended SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) Vide Gazette Notification No. SEBI/LAD-NRO/GN/2020/23 dated July 17, 2020.

2. SEBI has implemented the system driven disclosures in phases, under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and PIT Regulations vide circular no. CIR/CFD/DCR/17/2015 dated December 01, 2015, FD/DCR/CIR/2016/139 dated December 21, 2016 and SEBI/HO/CFD/DCR1/CIR/ P/2018/85 dated May 28, 2018,

Now SEBI has decided to implement the system driven disclosures under Regulation 7(2) of PIT Regulations for:

• member(s) of promoter group and
• designated person(s) in addition to the promoter(s) and
• director(s) of company (hereinafter collectively referred to as entities)

New Norms Prescribed

Kindly note that: To begin with, the system driven disclosures shall pertain to trading in equity shares and equity derivative instruments i.e. Futures and Options of the listed company (wherever applicable) by the entities.

Key points regarding steps required to be taken for implementation OF System driven disclosures:

1. Listed company shall provide the information including PAN number of Promoter(s) including member(s) of the promoter group, designated person(s) and director(s) (hereinafter collectively referred to as entities) as per PIT Regulations to the designated depository.

2. The designated depository shall share the information received from the listed company with other depository.

3. IN CASE OF ANY CHANGE / UPDATE IN ENTITITY’S DETAILS

Listed entity shall update the same with designated depository on same day (EVENT DATE) and then designated depository will intimate the other depository on the day of receipt from the listed company

4. In case of PAN exempt entity, respective depository shall share the Demat account number(s) details with the stock exchanges.

5. The depositories shall provide the following data pertaining to the tagged Demat account(s) separately to the stock exchanges on daily basis:

• Details of transactions for pledge/revocation/invocation of shares and other encumbrances such as NDU etc. of the entities.
• Details of off market transactions of the entities.
• Details of transmission of shares of the entities.
• Details of corporate actions such as ESOPs, Bonus, Rights, etc. of the entities
• Additionally, details of market transfers in case of PAN Exempt entities.

6. On consolidation of the transactions, if the disclosure is triggered under Regulation 7(2) of PIT Regulations, the stock exchanges shall disseminate the same on their websites. The transaction(s) carried out on T day shall be disseminated on T+2 day basis.

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