Sebi revises guidance note on insider trading norms

Listed companies, intermediaries and fiduciaries who handle unpublished price-sensitive information (UPSI) are required to maintain a digital database of persons and entities with whom such details are shared, regulator Sebi has clarified. The regulator on July 5 revised its guidance note on insider trading norms to provide clarity on the requirement of maintaining a structured digital database of persons and entities with whom UPSI is shared, and the scope of the investment company, according to a Sebi circular released Monday.

The regulator released the guidance note to remove certain difficulties in the interpretation or application of the provisions of the insider trading norms. According to the revised guidance, the requirement to maintain the structured digital database, containing the names of such persons or entities with whom UPSI is shared, is applicable to listed companies, intermediaries and fiduciaries who handle UPSI of a listed company in the course of business operations.

Sebi also clarified that the term 'investment company' intends to include only those non-individual corporate promoters of intermediaries or fiduciaries as a designated person, whose main object or principal activity, is investing in securities of other companies, the Sebi said. The regulator had first issued a guidance note on PIT (Prohibition of Insider Trading) norms on August 24, 2015, to bring clarity in the interpretation or application of the provisions of PIT.

The guidance note was subsequently amended on February 17, 2016. "...the guidance note has been revised on July 5, 2019, to provide clarity on the requirement of maintaining structured digital database and scope of an investment company," Sebi said Monday.