SEBI moots extending automatic closure of trading window for immediate relatives of designated persons

The trading window closure will be when be when the financial results of the listed entity are to be declared.

The market regulator has proposed the automatic closure of trading for immediate relatives of designated persons when the financial results of a listed entity are declared.

This facility is already available to designated persons (DPs) of listed entities. The regulator has suggested extending it to the immediate relatives as well.

In a consultation paper issued on February 7, the Securities and Exchange Board of India (SEBI) quoted regulation 2(1)(f) of PIT Regulations on the definition of immediate relative. Under this, , “immediate relative” means a spouse of a person, and includes parent, sibling, and child of such person or of the spouse, any of whom is either dependent financially on such person, or consults such person in taking decisions relating to trading in securities."

Comments and suggestions from public need to be sent in by February 28.

The framework will be the same as the one implemented for DPs through a circular issued more than two years ago, in August 2022.

The framework to restrict trading by DPs was implemented by way of freezing the PAN at security level during Trading Window Closure period. The freezing of would be carried out by the Stock Exchanges and Depositories based on the information provided by the listed company. Initially, this PAN freeze framework was made applicable for trading window closure on account of declaration of financial results of listed companies that were part of benchmark indices i.e. NIFTY 50 and SENSEX. Later, through a circular issued on July 19, 2023, it was extended to DPs of all listed companies.