The Securities and Exchange Board of India (SEBI) has amended the Prohibition of Insider Trading Regulations. Key updates include a broader definition of unpublished price-sensitive information (UPSI), incorporating factors such as fraud, defaults, litigation outcomes, and modifications to RPTs. New conditions specify that any fraud or defaults involving the company or its directors, or changes in corporate insolvency resolution processes, will be considered UPSI. Additionally, SEBI has clarified that information not originating from within the organization should be entered into the structured digital database within two calendar days. The amendments also introduce a revision to Regulation 3(5), mandating that companies ensure adequate internal controls for the digital database to prevent tampering. Moreover, Schedule B now states that a trading window will not be closed for UPSI that does not originate from the listed company itself, allowing designated persons to trade when the information is external. These updates strengthen oversight of insider trading and aim to ensure transparency and stricter compliance within organizations.
| Sl. No. | Regulation | Existing | Updated Regulation |
| 1. | 2(1)(n)- Definition of unpublished price sensitive information
(new sub-clauses inserted) |
“unpublished price sensitive information” means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following:
(i) financial results; (ii) — (iii) —- (iv) mergers, demergers, acquisitions, delistings, disposals and expansion of business and such other transactions; (v) changes in key managerial personnel
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“unpublished price sensitive information” means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following:
(i) financial results; (ii) — (iii) —- (iv) mergers, demergers, acquisitions, delistings, disposals and expansion of business, award or termination of order/contracts not in the normal course of business and such other transactions; (v) changes in key managerial personnel, other than due to superannuation or end of term, and resignation of a Statutory Auditor or Secretarial Auditor; (vi)change in rating(s), other than ESG rating(s); (vii) fund raising proposed to be undertaken; (viii) agreements, by whatever name called, which may impact the management or control of the company; (ix) fraud or defaults by the company, its promoter, director, key managerial personnel, or subsidiary or arrest of key managerial personnel, promoter or director of the company, whether occurred within India or abroad; (x)resolution plan/ restruct-uring or one-time settlement in relation to loans/borrowings from banks /financial institutions; (xi) admission of winding-up petition filed by any party /creditors and admission of application by the Tribunal filed by the corporate applicant or financial creditors for initiation of corporate insolvency resolution process against the company as a corporate debtor, approval of resolution plan or rejection thereof under the Insolvency and Bankruptcy Code, 2016; (xii) initiation of forensic audit, by whatever name called, by the company or any other entity for detecting mis-statement in financials, misappropriation/ siphoning or diversion of funds and receipt of final forensic audit report; (xiii) action(s) initiated or orders passed within India or abroad, by any regulatory, statutory, enforcement authority or judicial body against the company or its directors, key managerial personnel, promoter or subsidiary, in relation to the company; (xiv)outcome of any litigation(s) or dispute(s) which may have an impact on the company; (xv)giving of guarantees or indemnity or becoming a surety, by whatever named called, for any third party, by the company not in the normal course of business; (xvi)granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals. Explanation 1-For the purpose of sub-clause (ix): a. ‘Fraud’ shall have the same meaning asreferred to in Regulation 2(1)(c) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. b.‘Default’ shall have the same meaning as referred to in Clause 6 of paragraph A of Part A of Schedule III of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Explanation 2- For identification of events enumerated in this clause as unpublished price sensitive information, the guidelines for materiality referred at paragraph A of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as may be specified by the Board from time to time and materiality as referred at paragraph B of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 shall be applicable. |
| 2. | Regulation 3(5) | (5) The board of directors or head(s) of the organisation of every person required to handle unpublished price sensitive information shall ensure that a structured digital database is maintained containing the nature of unpublished price sensitive information and the names of such persons who have shared the information and also the names of such persons with whom information is shared under this regulation along with the Permanent Account Number or any other identifier authorized by law where Permanent Account Number is not available. Such database shall not be outsourced and shall be maintained internally with adequate internal controls and checks such as time stamping and audit trails to ensure non-tampering of the database | New Proviso inserted
Provided that entry of information, not emanating from within the organisation, in structured digital database may be done not later than 2 calendar days from the receipt of such information |
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3 |
Schedule B (Minimum Standards for Code of Conduct for Listed Companies to Regulate, Monitor and Report Trading by Designated Persons)
Clause 4(1) |
Designated persons may execute trades subject to compliance with these regulations. Towards this end, a notional trading window shall be used as an instrument of monitoring trading by the designated persons. The trading window shall be closed when the compliance officer determines that a designated person or class of designated persons can reasonably be expected to have possession of unpublished price sensitive information. Such closure shall be imposed in relation to such securities to which such unpublished price sensitive information relates. Designated persons and their immediate relatives shall not trade in securities when the trading window is closed. | New proviso inserted
Provided that, for unpublished price sensitive information not emanating from within the Listed Company, trading window may not be closed. |
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