Sebi issues revised disclosure formats on insider trading norm

Incorporating provisions of the amended insider trading norms, Sebi today issued the revised disclosure formats to be followed by market entities in this regard.
A stricter set of insider trading norms to check illicit transactions in shares of listed firms by management personnel and 'connected persons' came into force from April this year.
The new norms have revamped nearly two-decade old regulations on insider trading. Besides, greater clarity on concepts and definitions has been put in place along with a stronger legal and enforcement framework for prevention of insider trading under the new norms.
Sebi has now issued the revised disclosure formats under its Prohibition of Insider Trading Regulations, 2015.

In a circular to stock exchanges, Sebi asked them to put in place adequate systems with respect to implementing the revised disclosure format regime.
"Make necessary amendments to the relevant bye-laws, rules and regulations as applicable for the immediate implementation...," it noted.

Under the new insider trading regulations, the watchdog has expanded the definition of 'Insider' to include persons connected on the basis of being in any contractual, fiduciary or employment relationship that allows such people access to unpublished price sensitive information (UPSI).
A connected person is one who has a connection with the company that is expected to put him in possession of UPSI. The definition has also brought into its ambit persons who may not seemingly occupy any position in a company but are in regular touch with the company and its officers and are involved in the know of operations.

"It is intended to bring within its ambit those who would have access to or could access unpublished price sensitive information about any company or class of companies by virtue of any connection that would put them in possession of unpublished price sensitive information," Sebi said.
Under the new framework, Sebi has also defined a connected person in the context of insider trading activities.
A connected person would be someone who is or has during the past six months prior to the concerned act been associated with a company, directly or indirectly.