SEBI Eases Insider Trading Rules: Key Changes for Company Insiders

SEBI has streamlined the 'trading plans' framework for company insiders with access to unpublished price sensitive information (UPSI). The new rules, effective in 90 days, shorten the cool-off period to four months, allow for price limits within 20% of the closing price, and mandate strict compliance and reporting protocols.

India's capital markets regulator, SEBI, has updated its 'trading plans' framework, offering more flexibility to company insiders with access to unpublished price sensitive information (UPSI).

The revamped rules, effective within 90 days, reduce the minimum cool-off period between disclosure and trading plan execution from six to four months. This adjustment allows top-level management, perpetually in possession of UPSI, to trade in a compliant manner.

Additionally, insiders can now set price limits within +/-20% of the closing price at submission. Any trade outside these limits won't proceed. Upon plan approval, compliance officers must notify stock exchanges within two trading days. If insiders fail to implement plans, they must inform compliance officers, who will then present these cases to the Audit Committee for a justified review. The updated rules emphasize transparency and regulatory adherence, allowing insiders limited trading windows to meet various obligations, including creeping acquisitions and share disposal from exercised stock options.

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