SEBI permits OFS, rights entitlement transactions during trading window closure period

Markets regulator Sebi on Thursday allowed offer for sale (OFS) and rights entitlement transactions during the trading window closure period. Under market norms, listed companies need to use a trading window to monitor transactions by designated persons in a bid to prevent insider trading.

The compliance officer is responsible for closing the trading window, in case the designated persons are expected to be in possession of unpublished price sensitive information.

In a circular, Sebi said "trading window restrictions shall not apply in respect of OFS and RE (rights entitlement) transactions carried out in accordance with the framework specified by the Board from time to time."

Separately, the regulator said listed companies, intermediaries and fiduciaries will have to promptly inform the stock exchange regarding violations relating to code of conduct prescribed under the insider trading norms.

Further, they need to inform the exchanges about the violations in a prescribed format.

It said the amount collected from such violations will be credited to the Investor Protection and Education Fund (IPEF), which is administered by Sebi.

These new frameworks will come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said.