Automation of Continual Disclosures under Insider Trading Regulation

 SEBI Circular, SEBI/HO/ISD/ISD/CIR/P/2020/168 dated September 09, 2020:

 Automation of Continual Disclosures under Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 – System driven disclosures:

 Purpose: Purpose of this Circular is to automates the disclosure requirements under 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 by Stock Exchanges.

1. This circular supersedes the earlier circulars dated December 01, 2015, December 21, 2016 and May 28, 2018 with respect to implementation of System driven disclosures under PIT Regulations.

2. With respect to amendment in SEBI (Prohibition of Insider Trading) Regulations, 2015 dated July 17, 2020, it is now proposed to bring the members of promoters group and designated person(s) along with promoters, Directors of the Listed Entity.

3. Initially system driven disclosures will be applicable on trading in equity shares and equity derivative instruments i.e. Futures and Options.

Steps/process required to be taken for implementation:

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) to designated depository (herein Listed Entity can select any one Depository as Designated Depository), PAN exempt entities, the Investor’s DEMAT Account Number.

Timeline: Information shall be provided within 10 days from the date of this circular. (i.e from September 09, 2020).

2. Formats and Timelines shall be standardized by Depositories and Exchanges.

3. The information so shared by Listed Entities shall be shared by designated depository with another depository.

4. In case of any update in the details so provided, the Listed Entities shall update the information with designated depository on same day.

5. The update shall be shared by designated depository with other depository on same day.

6. Following information shall be shared by the designated depository with the Stock Exchanges,

i. Company-wise details of Promoters, Members of Promoters group, Designated Person and Directors.

ii. In case of PAN exempt entity, the DEMAT account number(s) details.

iii. On daily basis details of:

• transactions for pledge/revocation/invocation of shares and
• other encumbrances such as NDU etc. of the entities.
• Off market transactions of the entities.
• Transmission of shares of the entities.
• Corporate actions such as ESOPs, Bonus, Rights, etc. of
• the entities
• Market transfers in case of PAN Exempt entities.

7. PAN information, Stock Exchanges will do the following:

• Identify the transactions carried out on their trading system in the equities and equity derivative instruments;
• Identified trades shall be shared by the Stock exchange with all other Stock Exchanges;
• Consolidate the information of the transactions identified by them as well as received from other Stock Exchanges;
• If the disclosure is triggered under Regulation 7(2) of PIT Regulations, the Stock Exchanges shall disseminate the same on their websites;
• In case of any discrepancy, the issue shall be resolved by listed company, Stock Exchanges and depositories in coordination with one another.