NSE has recently issued a circular clarifying the implementation of the Securities and Exchange Board of India’s (SEBI) regulations regarding the prohibition of insider trading. The focus of these regulations is to restrict the trading activities of Designated Persons (DPs) by freezing their Permanent Account Number (PAN) at the security level.
Overview of the Circular
The circular from NSE, dated June 28, 2023, references an earlier SEBI circular issued in August 2022. Initially, these regulations were applied to listed entities included in the SENSEX 30 and NIFTY 50 indices from the quarter ending September 30, 2022. To ensure a smooth transition, the SEBI regulations will be gradually applied to the declaration of financial results by listed companies, as per the table provided in the circular.
Phased Implementation and Compliance
The trading window closure will begin from October 1, 2023, for a certain list of companies. This list will be expanded by January 1, 2024, with the addition of more companies. By April 1, 2024, all listed companies will be considered under the Prohibition of Insider Trading (PIT) Regulations.
It’s mandatory for qualifying companies to include all equity ISINs and those that can convert into equity. Listed entities are also required to designate one of the depositories as their designated depository and provide the information of Promoters, promoter group, directors, and DPs in the manner specified by the depositories.
National Stock Exchange of India
Department: LISTING
Circular Ref No: NSE/CML/2023/49 Date: June 28, 2023
To
All Listed Companies,
Subject: Trading Window closure period under Clause 4 of Schedule B read with Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level
This is in furtherance to the NSE circular no: NSE/CML/2022/40 dated August 5, 2022 and in accordance with Securities and Exchange Board of India (SEBI) circular no. SEBI/HO/ISD/ISD-SEC-4/P/CIR/2022/107 dated August 5, 2022, regarding Trading Window closure period under Clause 4 of Schedule B read with Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level.
1. According to the said circular issued by SEBI, to begin with, it was implemented for listed entities forming part of SENSEX 30 and NIFTY 50, for and from the quarter ended September 30, 2022.
2. To ensure smooth implementation, the provisions of said SEBI circular, shall be applicable to declaration of financial results by the listed company in phased manner as per table given below:
|
Sr. |
Quarter-end | Trading window closure start date from | No. of listed companies to be considered for PIT Regulations |
| 1 | September 30, 2023 | October 1, 2023 | List of companies shortlisted shall be shared in separate circular by July 21, 2023. |
| 2 | December 31, 2023 | January 1, 2024 | List of additional companies shortlisted shall be shared in separate circular by October 20, 2023. |
| 3 | March 31, 2024 | April 1, 2024 | All listed companies |
3. Companies that qualify must include all equity ISIN and ISINs that are convertible into equity.
4. Listed entities are required to designate one of the depositories as its designated depository and provide the information including PAN of Promoter(s), promoter group, director(s) and designated person(s) in the manner as specified by the depositories according to SEBI circular no – SEBI/HO/ISD/ISD/CIR/P/2020/168 dated September 9, 2020. Further, listed entities shall update their designated person list in the manner specified by the depositories on regular basis.
This circular shall come into force with effect from the quarter ending September 30, 2023.
The aforesaid circular is attached for reference.
All Listed companies are requested to take note and comply accordingly.
Yours faithfully
For National Stock Exchange of India Limited
Manasi Sawant
Senior Manager
