SEBI board meet outcome: Regulator amends prohibition of insider trading regulations

The Securities and Exchange Board of India (SEBI) on June 25 approved the amendments to the Prohibition of Insider Trading Regulations, 2015.

The market regulator's board considered and approved amendments to SEBI (Prohibition of Insider Trading) Regulations, 2015 which include maintaining a structured digital database, containing the nature of unpublished price sensitive information and the names of persons who have shared the information.

The amendments also include automation of the process of filing disclosures to stock exchanges; restriction on the trading window not to be made applicable for transactions as prescribed by SEBI; entities to file the non-compliances of Code of Conduct with the stock exchanges and amounts if any collected for such non-compliances shall be credited to Investor Protection Education Fund administered by Board under the SEBI Act.

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Over the last two months, SEBI has passed a series of orders as part of its investigation into the circulation of company results prior to its public announcement through Whatsapp.

The accused in each of these cases are some employees of a stockbroking firm, in their institutional sales team. They were found to have passed on near-accurate predictions of quarterly results about to be published by about 12 listed companies — Unpublished Price Sensitive Information (UPSI) — to clients of the firm.

The regulator fined them Rs 15 lakh each, in each of the orders passed, finding that their act of merely sharing the UPSI was a violation of insider trading rules.

Insider information abounds unchecked in Indian market circles in the form of rumours. Those who manage to get the information before the market gets wind stands to make a huge windfall.