28 August 2015

SEBI Guidance Note on Insider Trading

SEBI issues Guidance Note on Insider Trading Regulations, clarifies on ESOPs & contra-trades
SEBI issues Guidance Note on Insider Trading Regulations, 2015; Clarifies that exercise of ESOPs shall not be considered to be "trading" except for the purposes of Chapter III (relating to 'disclosure of trading by insiders'); States that any derivative contract that is settled in cash on expiry shall be considered to be 'contra-trade' and the trading in index futures or such other derivatives where scrip is part of such derivatives, need not be reported; States that buy-back offers, open offers, rights issues, FPOs, bonus are available to designated persons, and 'contra-trade' restrictions shall not apply; Clarifies that pledgor / pledgee may demonstrate that creation of pledge or invocation of pledge was bona fide and prove their innocence under proviso to Reg. 4(1) of the Regulations (relating to 'Trading when in possession of unpublished price sensitive information'); With respect to the trades done by compliance officer, SEBI clarifies that board of directors of the company shall be the approving authority and may stipulate procedures as are deemed necessary for ensuring necessary compliances: SEBI

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