SEBI

(Prohibition of Insider Trading)

Regulations, 2015
Reg’s 1- 12
 “Our markets are a success precisely because
they enjoy the world’s highest level of
confidence. Investors put their capital to work
& put their fortunes at risk – Because they trust
that the marketplace is honest.
 They know that our securities laws require free,
fair, & open transactions.”

Arthur Levitt, Chairman – the United States,

SEC (Feb. 27, 1998)
1980s – US –
SEC sued for Civil Action &
DOJ’s Criminal Cases
Against
Ivan Boesky (Character of Gordon Gekko) 
(1980s) (“I think greed is healthy. You can
be greedy & still feel good about yourself”)
& Michael Milken (Epitome of Wall Street
Greed)
Inspired the Hollywood movie -
“Wall Street”
 IT violations may -
IT - Undermines include
investor Tipping UPSI ?
confidence ? Securities Trading - By the
Fairness & person Tipped, &
integrity of SM ? Securities trading by those
who misappropriate such
information

Corporate insiders
Buying / selling a security
trade in their own In breach of a fiduciary duty / other
securities relationship of trust & confidence
(Must report their While in possession of material, Non
trades) – Public Information about securities
 Argument Against - Prohibition of IT?
Henry B. Manne Father of Law & Economics - Argued for De-
regularization of IT
IT & the Stock Market (1966)

IT is a legitimate form of compensation for corporate

employees - Permitting lower salaries that, in turn,
benefits SH’s. It provides an incentive to innovation –
By promising huge rewards for developing a Plan /
Product that will lead to a precipitous rise in the stock.

 Will reduce cost of the Co. & increase efficiency

& ensure proper price discovery.
 Argument Against - Prohibition of IT?
 Henry B. Manne; Bruce Fein, What’s So Bad About
Insider Trading?, The Legal Times, January 6, 1992

 Is a victimless offense & that enforcing IT

prohibitions is simply not cost effective;
 Amount of money recovered does not justify the
money & human capital spent on investigating &
prosecuting IT’s

 Will drive the price of the securities near to its

real value
 Nanny- The Telegraph 1998
Strict IT Reg. - May have a chilling effect
on the work of securities analysts -
Prohibits “Sensible Dialogue” between
officers of the Co. & Analysts

 Prof. Jonathan Macey, Yale Law School –

Views –
 Should be left to the Co. to have its own
policy
Conflict between ‘fairness’ & ‘efficiency’.
Insiders use UPSI (Privileged?) to reap profits / to avert
losses
Certainly - Unfair to permit trading of securities when
individuals are differently informed on the affairs of a Co.
Other investors / SH’s may suffer severe economic
disadvantage.

 Illegal IT cause loss of faith of the investors & is

detrimental to the interest of the market.

Powerful Corp. - Give huge Donations to - Political

parties & - Create political pressure over SEBI ?
 Insider Trading
 Trading that takes place -
 When those privileged with confidential
information about important events -
 Use the special advantage of that knowledge -
 To Reap Profits / Avoid Losses on the stock
market -
 To the detriment of the source of the
information &
 To - Investors who buy / sell their stock without
the advantage of “Inside” Information.
 Patel Committee (1986) on IT

“IT generally means

Trading in the shares of a Co.
By - Person who are in the management
of the Co. / Are close to them
On the basis of UPSI regarding the working of
the Co.
Which they possess but which is not available
to others”.
US Stock Market Crash - 1929 - Congress
enacted -
The Securities Act of 1933
The Securities Exchange Act of 1934
US – 1st country – To Make a comprehensive
legislation on IT - SE Act 1934.
Anti – Fraud Rule (Manipulative / Deceptive
securities transaction) Sec. 10(b), SE. Act
Rule against Short Swing Profit Making
Sec. 16 (b), SE. Act
Courts helped in developing - Two Theories
 Disclose / Abstain Theory /
Classical theory Misappropriation Theory
 Insider must either  Person breaches a
 Disclose UPSI to the public fiduciary duty owed to -
before making the trade / Source of UPSI by
 Abstain from making a communicating it to a 3rd
trade at all.
party who uses it to
 Cady Roberts & Co, 40
trade.
SEC 907 (1961)  US v Vincent F Chiarella, 445
 Applies to Insider Trading by U.S 222 (1980)
directors, officials, employees  Applies to those who are not
& other associated persons / by themselves insiders but
Connected Persons acquire UPSI from an insider
 Referred also in India who places trust in them to
keep it confidential.
Disclose / Abstain Theory / Misappropriation
Classical Theory Theory
 Applies to insiders  Applies to outsiders (non
(Employees of issuer employees of issuer whose
whose securities are securities are subject of IT)
 Who learn the subject
subject of IT)
material NPI in the course of
 Who learn the subject their employment &
material NPI in the course  Who owe a fiduciary
of their employment & duty to someone other
 Who owe a fiduciary duty than the issuer not to use
to the issuer not to use the the information for their
subject information for personal benefit.
their personal benefit.  O’Hagan case
 INDIA
India - 1948 - Thomas Committee - Disclosures by
directors & managers. (incorporated in SS 307 & 308)
Sachar Committee – 1977
Patel Committee - 1986
 Abid Hussain Committee - 1989 - Recommended - Person should
be penalized by both Civil & Criminal proceeding for IT.
On Recommendation of all the above committees
SEBI (Prohibition of Insider Trading)
Regulations 1992
 Justice N.K. Sodhi Committee  

 SEBI (Prohibition of Insider Trading

Regulations) 2015
Trading is illegal ?
 When an Insider / deemed to be insider of PLC
trade in the securities… on basis of UPSI for the
intention of making profit / avoiding loss.
 Reason?
 Insiders access to privileged UPSI – This
Information
Put them in an advantageous position.
Can be exploited to make swing profit /
insulate loss
Insiders can trade only after UPI is made public
& the information is disseminated among public.
 Prohibition on insider trading of securities –
Sec. 195 CA, 2013
 (1) No person including any director / KMP of a
Co. shall enter into IT:
 P… Nothing contained in T/S/S shall apply to
any communication required in the
Ordinary course of business
Profession
Employment
Under any law

Repealed by Amendment 2017 w/e/ from Feb 2018

 Expl. (a)
“Insider Trading” means - (i) An act of
Subscribing - Buying - Selling – Dealing
Agreeing to Subscribe – Buy - Sell / Deal
In any securities
By any
Director / KMP / Any other officer of a Co.
Either as principal / agent if such director /
KMP / any other officer of the Co.
Is reasonably expected to have access to any
Non Public PSI in respect of securities of Co.; /
 Sec. 195 CA, 2013
 (ii) An act of counselling about procuring /
communicating directly / indirectly any NPPSI to any
person;
 (b) “Price-Sensitive Information” means:
Any information which relates, directly / indirectly, to
a Co. &
Which if published is likely to materially affect the
price of securities of Co.
 (2) If any person contravenes T/P/O/T/S – He shall be
punishable with imprisonment for a term which may
extend to 5 years / With fine which shall not be less than
Rs. 5 lakh but which may extend to Rs. 25 crore / 3
times the amount of profits made out of IT whichever is
higher / with both.
 SEBI (PIT) Reg’s, 2015 - Compliance Officer means -
 a) Any senior officer, designated so & reporting to
BOD / Head of the organization in case BOD is not
there
 b) Who is financially literate & is capable of
appreciating requirements for legal & regulatory
compliance U/T/R’s
 c) Who shall be responsible for compliance of
 Policies – Procedures - Maintenance of records -
Monitoring adherence to rules for the preservation
of UPSI - Monitoring of trades - Implementation of
the codes
 Specified in T/R’s U/T/ Overall supervision of BOD
(listed Co.) / Head of an organization, as the case may
be;
 Insider
Connected Persons
Deemed to CP’s
Price Sensitive Information
UPSI
 Reg. 2(g)
“Insider” means any person who is:
(i) A Connected Person;
(ii) in Possession of / Having Access to UPSI;
Since “Generally Available Information” is
defined - It is intended that anyone in Possession
of / Having Access to UPSI should be considered
an “insider”
Regardless of how one came in possession of /
had access to such information.
Intended to bring within its reach any
person who is in receipt of / has access to
UPSI.
 Reg. 2(d) (i) - Connected Person (CP)
means
a) Director
b) Occupies the position as an
 Officer /
 Employee of the Co. /
 Holds a position involving a professional /
business relationship between himself & Co.
 On temporary / permanent, that allows him,
directly / indirectly, access to UPSI
 On Temporary / Permanent (1992)
(ii) Without prejudice to the generality of the
foregoing - Persons falling within the following
categories shall be Deemed to be CP’s unless the
contrary is established:

(a) An immediate relative (IR) of CP’s above

(b) A Holding Co. / Associate Co. / Subsidiary Co. /

(c) An intermediary (S. 12, SEBI Act) / An employee /

director thereof;

(d) An Investment Co. - Trustee Co. - AMC / An

employee / director thereof; or
(e) An official of a SE / of clearing house / Corp.;

(f) A member of board of trustees of a MF /A member of

BOD of AMC of a MF / is an employee thereof; /
(g) A member of BOD’s / An employee, of a PFI as
defined in S. 2(72), CA, 2013
(h) Is an official / an employee of a SRO recognised /
authorised by SEBI of a regulatory body
(i) Is a banker of the Co.

(j) A concern, firm, trust, HUF, Co. / Assn. of persons

wherein a director of a Co. / his IR / banker of Co., has
more than 10% of the holding / interest;
 A CP is one who has a connection with Co. that
is expected to put him in possession of UPSI
IR’s & other categories of persons specified - Presumed
to be CP - Rebuttable
Intended to bring into its ambit
Persons who may not Who would have
seemingly occupy any access to / could access
position in a Co. but UPSI about any Co. /
are in regular touch Class of Co’s by virtue
with Co. & its officers of any connection that
& are involved in Co’s would put them in
operations. possession of UPSI.
 Reliance Industries Ltd. v SEBI, 2004 IndLaw SAT 234
 Acq. of RIL‟s stake in L&T by GIL
 Mukesh Ambani & Anil Ambani – insiders ?
Directors on BOD of L&T
 Reasonably expected to have access to L&T‟s
UPSI ?
 Connected persons – U/Reg. 2 (c) (Old Law)
 RIL - “Deemed to be a CP” with L&T
 As to Violation?
UPSI was not received by RIL / Ambanis as insiders
of L&T – Not held liable for violation of Reg. 3
 Samir C. Arora v SEBI, [2005] 59 SCL 96 (SAT).
 Dsq Holdings Ltd v SEBI, - Appeal No: 50/2003 – SAT
15/10/04
 Reg. 2 (l)
Dealing in securities” in any securities by
any person either as principal / agent (Old
Law- 1992)
Trading means & includes –
Subscribing - (Extended to Primary Market –
covering IPO?)
Buying - Selling - Dealing /
Agreeing to subscribe, buy, sell, deal
 In any securities, & “Trade” shall be construed
accordingly.
 NOTE: U/T Parliamentary mandate
 Sec. 12A(e) & S.15 G, SEBI Act employs the
term “Dealing in securities”, -
 It is intended to widely define the term
“trading” to include dealing.
 Such a construction is intended to curb the
activities based on UPSI which are strictly not
Buying - Selling / Subscribing
Pledging, etc when in possession of UPSI
‘Trading Day’ means - A day on which RSE’s
are open for trading; Reg. 2(m)
Price Sensitive Information – Reg. 2(ha)
PSI - Means any information
Which relates directly / indirectly to a
Co. &
Which if published is likely to
materially affect the price of securities
of the Co.
Reg. Reg
2(a) 2- Acquirer means:
UPSI means (Reg. 2(n) (2015) )
(B)

Any information

Relating to a Co. or Its securities

Directly or Indirectly

That is not generally available

Which upon becoming generally available

Shall – Ordinarily including
Is likely to materially But Not restricted to
affect the price of the Information relating
securities To the following
 UPSI - Means any information

Questions

 Financial Results of the Co. ?

 Declaration of dividends ?
 both interim & final

Change in capital structure?

(Issue & BB of securities ?
 Changes in KMP?
Mergers - De-mergers – Acquisitions – Delisting -
Disposals &
Expansion of business & such other transactions ?
(execution of new projects)
Changes in - Policies - Plans / Operations of the Co ?

 Material events in accordance with Cl. 36 of Listing

Agreement – (Strikes, lock outs, closure on account of
power cuts, etc. & events - have a bearing on the
performance / operations of Co.

 All the above - Shall be deemed to be PSI

Note:
It is intended that information relating to a Co. /
Securities, that is not generally available would
be UPSI if it is likely to materially affect the price
upon coming into the public domain. -UPSI listed
above is to give illustrative guidance of UPSI
 Reg. 2(1)(e) - Generally available information
means - Information that is accessible to the
public on a non-discriminatory basis;
 Note:
 Information published on - Website of a SE
would ordinarily be considered generally
available.
Information which is not published by the
Co. / its agents & is not specific in nature
Reports in Print / Electronic media ?
Expl.: Speculative reports in print /
electronic media shall not be considered as
published information.
 Prohibition of

Chapter – II
Restrictions on Communication
&
Trading by Insiders
 1992 - Prohibition on Dealing, Communicating / Counselling –
Prohibition on -Dealing,
PIT- 2015 Communicating
Communication / Counselling
/ Procurement of UPSI - –
Chapter II - Reg. 3 (1992) Chapter – II 2015
 No insider shall -  (1) No Insider Shall
 (i) Either on his own behalf /
on behalf of any other person,
Communicate
deal in securities of a Co. Provide /
listed on any SE when in Allow access to any
possession of any UPSI; /
 (ii) Communicate / counsel / UPSI,
Procure directly / indirectly  Relating to a Co. /
any UPSI to any person who Securities Listed/
while in possession of such Proposed to be Listed
UPSI shall not deal in 
securities:
To any person
including other insiders
 Chapter II - Reg. 3 (1992) Reg. 3 (2015)

 P… nothing contained Except where such

above shall be applicable communication is in
to any communication
required in the ordinary furtherance of
course of business / legitimate purposes,
profession / employment / performance of
under any law.
duties / discharge of
legal obligations.
 Reg. 3A - No Co. shall deal in
the securities of another Co. /
Associate of that other Co. Chinese Wall Defences
while in possession of any
UPSI.
Chapter II - Reg. 3 (1992) Reg. 3(2) (2015)
 No Person SHALL
PROCURE from / CAUSE
the communication by any
insider of UPSI
 Relating to a Co. /
Securities listed / proposed
to be listed,
 Except in furtherance of
legitimate purposes,
performance of duties /
discharge of legal
obligations.
 Reg. 3(1)
 Intended to cast –
An obligation on all insiders who are
essentially Persons in possession of UPSI to
handle such information with care & to deal
with the information with them when
transacting their business strictly on a need-
to-know basis.
 Intended to lead –
Organisations developing practices based on
need-to-know principles for treatment of
information in their possession.
Creating a Chinese Wall ?
 Reg. 3(2)
 Intended to impose
A Prohibition on unlawfully procuring
possession of UPSI
 Inducement & procurement of UPSI not in
furtherance of one’s legitimate duties &
discharge of obligations would be illegal
U/T/Provision.

 Rakesh Agarwal v SEBI, (2004 ) 49 SCL 351 SAT

(Relied on Basic Incorporated, 484 US 224; TCS
Industries v Northway, 426 US 449
 Reg. 3 - 2015
 (3) N…in T/R, an UPSI may be communicated,
provided, allowed access to / procured, in
connection with a transaction that would: -
(i) Entail an obligation to make an open offer
U/T / TO Code where BOD’s is of informed
opinion that the proposed transaction is in the
best interests of the Co.;
 N: Intended to acknowledge - Necessity of
Communicating – Providing – Allowing access to /
procuring
 UPSI for substantial transactions such as takeovers,
M&A involving trading in securities & change of
control to assess a potential investment. *
 (ii) Not attract the obligation to make an open
offer U/T / TO Code
 But where BOD… is of informed opinion that
Proposed transaction is in the best interests
of the Co. &
Information that constitute UPSI is
disseminated to be made generally available
at least 2 trading days prior to the proposed
transaction being effected in such form as
BOD’s may determine.
 N: Intended to Permit Communicating -
Providing - Allowing access to / Procuring UPSI
also in transactions that do not entail an open
offer obligation U/T Takeover regulations if it is
in the best interests of Co.
 BOD’s, however, would cause public disclosures
of such UPSI well before the proposed
transaction to rule out any information
asymmetry in the market.
 Reg. 3(4)
 For purposes of S/R(3)
 BOD’s shall require - Parties to execute
agreements to contract confidentiality & non-
disclosure obligations on the part of such
parties &
 Such parties shall keep information so received
confidential - Except for the purpose of S/R(3)
&
 Shall not otherwise trade in securities of the Co.
when in possession of UPSI.
 Trading when in possession of UPSI Reg. 4

 (1) No insider shall trade in securities that are

listed / proposed to be listed on a SE when in
possession of UPSI:
 P… insider may prove his innocence by
demonstrating the circumstances including the
following : -
(i) Transaction is an off-market inter-se
transfer between promoters who were in
possession of - same UPSI without being in
breach of Reg. 3 & both parties had made a
conscious & informed trade decision;
 Trading when in possession of UPSI Reg. 4
 (ii) in the case of non-individual insiders: -
(a) Individuals who were in possession of such UPSI
were different from individuals taking trading
decisions & such decision-making individuals were
not in possession of such UPSI when they took the
decision to trade; &
(b) Appropriate & adequate arrangements were in
place to ensure that T/Reg’s are not violated &
 No UPSI was communicated by individuals possessing the
information to individuals taking trading decisions & there is
no evidence of such arrangements having been breached;
 (iii) Trades were pursuant to a Trading Plan (TP) set
up in A/W/Reg. 5
 N: Reg. 4
 When a person who has traded in securities has been
in possession of UPSI
 His trades would be presumed to have been motivated
by the knowledge & awareness of such information in
his possession.
 Reasons for which he trades / purposes to which he
applies the proceeds of the transactions are not
intended to be relevant for determining whether a
person has violated T/R.
 He traded when in possession of UPSI is what would
need to be demonstrataed at the outset to bring a
charge.
 Onus?
 On the person leveling the charge ?
 Once this is established, it would be open to the insider
to prove his innocence ?
 Can demonstrate that he has not indulged in IT ?
 NOTE: Reg. 4
4 (2) In the case of - CP’s:
Onus of establishing – they were not in
possession of UPSI
Shall be on – such CP’s &
In other cases - on SEBI
(3) SEBI may specify such standards &
requirements, from time to time, as it may
deem necessary for T/P/O/T/Reg’s
 Trading Plan (TP) - Reg. 5
Intends to give
An option to persons who may be perpetually in
possession of UPSI & enabling them to trade in
securities in a compliant manner.
Would enable the formulation of a TP
By an insider
To enable him to plan for trades
To be executed in future
By doing so - Possession of UPSI when a trade
under a TP is actually executed would not
prohibit the execution of such trades that he had
pre-decided even before UPSI came into being.
 Trading Plan (TP) - Reg. 5
(1) An insider shall be entitled to formulate a TP &
Present it to CO for approval & public disclosure
Pursuant to which trades may be carried out on his
behalf in accordance with such TP
Such TP shall:-
(i) Not entail commencement of trading on behalf of the
insider earlier than 6 months from the public
disclosure of TP
(ii) Not entail trading for the period between 20th
trading day prior to
 the last day of any financial period for which results are
required to be announced by the issuer of the securities &
 2nd trading day after the disclosure of such financial results.
 Reg. 5 (2)
 N: Intended - To get the benefit of a TP - A cool-off
period of 6 months is necessary.
 Such a period is considered reasonably long for UPSI
that is in possession of insider when formulating TP, to
become generally available.
 Also considered to be a reasonable period for a time lag
in which new UPSI may come into being without
adversely affecting TP formulated earlier.
 Only a statutory cool-off period & would not grant
immunity from action if - Insider were to be in
possession of the same UPSI both at the time of
formulation of TP & implementation of the same.
 Reg. 5 (2)
(iii) entail trading for a period of not less
than 12 months;
TP should before 12 months (undesirable
to have frequent announcements of TP’s)
(iv)) Not entail overlap of any period for
which another TP is already in existence
(undesirable to have multiple trading plans)
 (v) TP may set out the value of securities / No. of
securities to be traded along with - Nature of the trade
& intervals at / dates on which such trades shall be
effected. (Specific dates / specific time intervals may be
set out in the plan)#
 Reg. 5 (2) & (3)
(vi) Not entail trading in securities for
market abuse.
(3) CO shall review TP to assess –
Whether the plan would have any potential
for violation of T/Reg’s
Shall be entitled to seek such express
undertakings as may be necessary to enable
such assessment
To approve & monitor the implementation of
the plan. #
 Reg. 5 (4) & (5)
 (4)) TP - once approved - shall be irrevocable & Insider shall
mandatorily have to implement the plan
 Without being entitled to either deviate from it / to execute any
trade in the securities outside the scope of TP.
 P… Implementation of TP shall not be commenced if any UPSI
in possession of insider at the time of formulation of the plan has
not become generally available at the time of the commencement
of implementation &
(5) In such event - CO shall confirm that the
commencement ought to be deferred until such UPSI
becomes generally available information so as to avoid
a violation of Reg. 4(1)
Upon approval of TP - CO shall notify the plan to -
SE’s on which the securities are listed.
 Trading Windows ?
 TW - will be closed if any of the above quoted
corporate action is to be announced.
 Insiders cannot deal in securities of the Co.
during this period.
 Chapter – III
Disclosures of Trading by Insiders
 General provisions. Reg. 6
 (1) Every public disclosure U/T/Ch. shall be made in
such form as may be specified.
 (2) Disclosures to be made by any person U/T/Ch. shall
include those relating to trading by
Such person’s IR’s, &
By any other person for whom such person takes
trading decisions.
 T/R’s are primarily aimed at preventing abuse by trading when
in possession of UPSI & therefore, what matters is?
 Whether the person who takes trading decisions is in
possession of such information
 Rather than
 Whether the person who has title to the trades is in such
possession.
 Reg. 6
(3) Disclosures of trading in securities
shall also include trading in derivatives of
securities & -
Traded value of the derivatives shall be taken
into account for purposes of this Ch.:
 P… trading in derivatives of securities is
permitted by any law for the time being in
force.
 (4) Disclosures made U/T/Ch. shall be
maintained by the Co., for a minimum period of
5 years, in such form as may be specified.
 Disclosures by certain persons Reg. 7
 (1) Initial Disclosures -
 (a) Every promoter - KMP & director of every Co.
whose securities are listed on any RSE
Shall disclose his holding of securities of the Co. as
on the date of T/R’s taking effect,
To the Co. within 30 days of T/R’s taking effect;
 (b) Every person on appointment as a KMP / a
director / upon becoming a promoter shall disclose his
holding of securities of the Co. as on the date of
appointment / becoming a promoter, to the Co. within
7 days of such appointment / becoming a promoter.
 Continual Disclosures - Reg. 7(2)
 (a) Every promoter, employee & director… -
shall disclose to Co. - No. of such securities
acquired / disposed of within 2 trading days of
such transaction if the value of the securities
traded, whether in one transaction / a series of
transactions over any calendar quarter,
aggregates to a traded value in excess of Rs. 10
lakh / such other value as may be specified;
 (b) Every Co. shall notify the particulars of such
trading to SE on which the securities are listed
within 2 trading days of receipt of the disclosure /
from becoming aware of such information.
 Continual Disclosures - Reg. 7(2)
 Explanation - It is clarified for the avoidance of
doubts that the disclosure of the incremental
transactions after any disclosure U/T/S/R, shall
be made when the transactions effected after
the prior disclosure cross the threshold
specified in S/R (2) cl. (a).
 (2) Continual Disclosures.
Disclosures by other CP’s:
(3) Any Co. whose securities are listed on a
SE may, at its discretion require any other
CP / class of CP’s to make disclosures
of holdings & trading in securities of the Co.
In such form & at such frequency as may be
determined by the Co.
In order to monitor compliance with T/R’s.
 NOTE: This is an enabling provision for listed
Co’s to seek information from those to whom it
has to provide UPSI.
 This provision confers discretion on any co. to
seek such information.
 E.g. - Listed Co. may ask that a management
consultant who would advise it on corporate
strategy & would need to review UPSI, should
make disclosures of his trades to the Co.
 CHAPTER – IV
CODES OF FAIR DISCLOSURE
AND CONDUCT
 Code of Fair Disclosure Reg. 8
 (1) BOD’s of every Co., whose securities are
listed on a SE,
Shall formulate & publish on its official
website
A code of practices & procedures (CPP) for
fair disclosure of UPSI
 That - It would follow in order to adhere to each of the
principles set out in Sch. A to T/R’s, without diluting
the provisions of T/R’s in any manner.
 (2) Every such CPP… for fair disclosure of UPSI &
every amendment thereto shall be promptly intimated
to SE where the securities are listed.
 Code of Conduct (CC) - Reg. - 9
 (1) BODs of every listed Co. & market intermediary
shall formulate a CC
To regulate, monitor & report trading by its
employees & other CPs towards achieving
compliance with T/R’s, adopting the minimum
standards set out in Sch. B to T/R’s, without diluting
the provisions of T/R’s in any manner.
 (2) Every other person who is required to handle UPSI
in course of business operations shall formulate a CC
To regulate, monitor & report trading by employees
& other CPs towards achieving compliance with
T/R’s, adopting the minimum standards set out in
Sch. B to T/R….
(3) Every listed Co., market intermediary
& other persons formulating a CC
Shall identify & designate a CO to
administer the CC & other requirements
U/T/R’s.
N: Intended to designate a senior officer as
CO with the responsibility to administer
the CC & monitor compliance with T/R’s.
 Chapter – V - Miscellaneous
Sanction for violations.
 Reg. 10 - Any contravention of T/R’s shall be dealt with
by SEBI in accordance with the Act.
 Power to remove difficulties
 Reg. 11 - In order to remove any difficulties in the
interpretation / application of T/P/O/T/R’s - SEBI shall
have the power to issue directions through guidance
notes / circulars:
 P…. where any direction is issued by SEBI in a specific
case relating to interpretation / application of any
provision of T/R, it shall be done only after affording a
reasonable opportunity of being heard to CP’s & after
recording reasons for the direction.
 Repeal and Savings - Reg. 12(1) SEBI (PIT) Regulations, 1992 are
hereby repealed.
 (2) N…such repeal -
 (a) Previous operation of the repealed Reg’s / anything duly done / suffered
thereunder, any right, privilege, obligation / liability acquired, accrued /
incurred U/T/ repealed Reg’s, any penalty, forfeiture / punishment incurred
in respect of any offence committed against the repealed Reg’s, / any
investigation, legal proceeding / remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture / punishment as aforesaid,
shall remain unaffected as if the repealed Reg’s had never been repealed;
and
 (b) Anything done / any action taken / purported to have been done / taken
including any adjudication, enquiry / investigation commenced / show-cause
notice issued U/T repealed Reg’s prior to such repeal, shall be deemed to
have been done / taken under the corresponding provisions of T/ Reg’s;
 (3) After the repeal of SBEI (PIT) Reg, 1992, any reference thereto in any
other regulations made, guidelines or circulars issued thereunder by SEBI
shall be deemed to be a reference to the corresponding provisions of these
regulations.
 SCHEDULE A
[See sub-regulation (1) of regulation 8]
 SCHEDULE A
[See sub-regulation (1) of regulation 8]
SCHEDULE B - See Reg. 9 (1) & (2)
SCHEDULE B - (3)
 Sch. B – (4)
DP’s may execute trades subject to compliance with T/R
5
(6) (7) & (8)
• Board’s right to investigate
THE END