SEBI implements system driven disclosures under SEBI (Prohibition of Insider Trading) Regulations, 2015; move driven towards members of promoter group and designated persons in addition to promoters and directors

In a Circular dated 9th September, 2020, the Securities and Exchange Board of India (“SEBI”) has issued information regarding automation of Continual Disclosures under *Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”).

In addition to the promoter(s) and director(s) of company (“entities”) under Regulation 7(2) of PIT Regulations, SEBI has decided to implement the system driven disclosures for member(s) of promoter group and designated person(s).

Key Takeaways:

  1. System driven disclosures will pertain to trading in equity shares and equity derivative instruments i.e. Futures and Options of the listed company (wherever applicable) by the entities.
  2. Procedure for implementation of the system driven disclosures:
  • The various formats and timelines for sharing of data will be standardized, as agreed upon by the depositories and exchanges.
  • Listed companies will provide the information including PAN number of Promoter(s) including member(s) of the promoter group, designated person(s) and director(s) as per PIT Regulations to the designated depository in the format and manner prescribed by the Depositories.
  • For PAN exempt entities, the Investor’s Demat account number(s) will be specified by the listed company. The information must be provided within 10 days from the date of this circular.
  • In case of any subsequent update in the details of the entities, the listed company has to update the information with the designated depository on the same day. The designated depository will thereafter share the incremental changes with the other depository on the day of receipt from the listed company.
  • Based on the PAN of First holder/Demat account number(s), the depositories will tag such Demat accounts in their depository systems at ISIN level. Further, the designated depository has to also share with the stock exchanges, company-wise details of entities.

Please note that the detailed procedure is provided at Annexure-A of the appended Circular.

  1. This system will continue to run parallelly with the existing system i.e. entities will continue to independently comply with the disclosure obligations under PIT Regulations as applicable to them till March 31, 2021.
  2. The Depositories and Stock Exchanges have to make necessary arrangements such that the disclosures pertaining to PIT Regulations are disseminated on the websites of respective stock exchanges with effect from October 01, 2020.
  3. The disclosures generated through the system must be displayed separately from the regular disclosures filed with the exchanges.

Background:

In the earlier Circulars mentioned below, SEBI had implemented the system driven disclosures in phases, under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and PIT Regulations.

Subsequently, through a Gazette Notification dated July 17, 2020, the PIT Regulations have been further amended.

In light of the above-mentioned amendment, the present Circular has been issued.

Please note-

This Circular supersedes the earlier Circulars dated December 01, 2015, December 21, 2016 and May 28, 2018 with respect to implementation of System driven disclosures under PIT Regulations.

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Regulation 7(2) deals with Continual Disclosures

 

Source: Securities and Exchange Board of India

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