Under the new framework, it would be mandatory to disclose the source of information, besides, confidentiality regarding the identity of the informant would be protected, the regulator said in a statement.
The Securities and Exchange Board of India (Sebi) said,"reward would be given in case the information provided leads to a disgorgement of at least Rs 1 crore in accordance with the PIT (Prohibition of Insider Trading) Regulations".
The regulator said that Office of Informant Protection (OIP) has been established by it as an independent office for receiving and processing Voluntarily Information Disclosure Form (VID form).
The OIP would serve as a medium of exchange between the informant or legal representative and the regulator.
According to Sebi, an informant would have to voluntarily submit original information pertaining to any violation of insider trading laws to the OIP, through a VID form. The information would have to be submitted by the informant directly in which case his identity would be required to be revealed at the time of submission of the VID form.
In case, the information is submitted through a legal representative, the identity of the informant is not required to be revealed at the time of submission of VID form. However, the identity of the informant would be required to be revealed prior to payment of reward, if any, it added.
"Every person required to have a code of conduct under PIT regulations shall ensure that such a code of conduct provides for suitable protection against any discharge, termination, demotion, suspension, threats, harassment, directly or indirectly or discrimination against any employee who files a VID Form," Sebi noted.
The PIT (Prohibition of Insider Trading) Regulations were amended in September by inserting a new chapter dealing with informant policy in relation to insider trading laws. The new amendments will come into force with effect from December 26, 2019.
Sebi said that VID Forms will be available on its website from December 26.
Earlier in June, the regulator came out with this proposal in order to curb insider trading and had sought comments from public on the same.