SEBI Trading Window Closure: Framework Expansion for Designated Persons

Introduction: The National Stock Exchange of India (NSE) has issued a crucial circular, NSE/CML/2023/79, on November 17, 2023, addressing the Trading Window closure period under Clause 4 of Schedule B, read with Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”). This circular extends the framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at the security level to all listed companies. This development aligns with SEBI’s guidelines and previous circulars issued by NSE.

Detailed Analysis:

1. Background and Previous Circulars: The circular refers to earlier communications, including NSE Circulars NSE/CML/2022/40, NSE/CML/2023/49, and NSE/CML/2023/59, dated August 05, 2022, June 28, 2023, and July 31, 2023, respectively. Additionally, SEBI circulars SEBI/HO/ISD/ISD-SEC-4/P/CIR/2022/107 and SEBI/HO/ISD/ISD-PoD­2/P/CIR/2023/124, dated August 5, 2022, and July 19, 2023, respectively, are crucial references.

2. Extension of Framework: The circular emphasizes the extension of the framework to all listed companies, providing Annexure I for the Next Top 1,000 companies based on BSE Market Capitalization as of June 30, 2023. Qualifying companies must include all equity ISIN and convertible ISINs.

3. Depository Designation and Information Update: Listed entities are mandated to designate a depository and furnish information, including PAN details of Promoters, promoter groups, directors, and designated persons. This aligns with SEBI circular no – SEBI/HO/ISD/ISD/CIR/P/2020/168, dated September 9, 2020. Furthermore, regular updates to the designated person list must be provided as specified by the depositories.

4. Implementation Date: The circular specifies that the framework for trading window closure will come into effect from January 1, 2024. Companies are urged to refer to the attached circular for comprehensive details.

Conclusion: In conclusion, NSE’s latest circular reflects a proactive approach to align with SEBI regulations and enhance the framework for Trading Window closure. The extension of these measures to all listed companies underlines the commitment to maintain market integrity and prevent insider trading. Listed companies are urged to thoroughly review the circular, ensure compliance with the specified deadlines, and take the necessary steps to update their systems and processes accordingly.

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National Stock Exchange of India

Circular

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”) – Extending framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level to all listed companies in a phased manner

This is in furtherance to NSE Circular no. NSE/CML/2022/40 dated August 05, 2022 and NSE/CML/2023/49 dated June 28, 2023 and NSE/CML/2023/59 dated July 31, 2023 and in accordance with Securities and Exchange Board of India (SEBI) circular no. circulars SEBI/HO/ISD/ISD-SEC-4/P/CIR/2022/107 dated August 5, 2022 and SEBI/HO/ISD/ISD-PoD­2/P/CIR/2023/124 dated July 19, 2023, 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, please find attached Annexure I for Next Top 1,000 companies in terms of BSE Market Capitalization as of June 30, 2023.

2. Companies that qualify must include all equity ISIN and ISINs that are convertible into equity.

3. 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 for trading window closure with effect from January 1, 2024.

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