Sebi board approves amendments to prohibition of insider trading rules

Amendments include maintaining a structured digital database containing nature of unpublished price sensitive information and names of persons who have shared the information

The board of the Securities and Exchange Board of India (Sebi) met on Thursday in Mumbai via video conferencing. The Sebi board decided to amend the prohibition of insider trading rules. The board also approved temporary relaxation of regulations relating to raising of capital from securities market.

According to the press release, "The Board considered and approved amendments to SEBI (Prohibition of Insider Trading) Regulations, 2015. The amendments include maintaining a structured digital database containing nature of unpublished price sensitive information and the names of persons who have shared the information; automation of process of filing disclosures to stock exchanges, restriction on trading window not to be made applicable for transactions as prescribed by SEBI, entities to file the non-compliances of Code of Conduct with the stock exchanges and amounts if any collected for such non compliances shall be credited to Investor Protection Education Fund administered by Board under the SEBI Act."

The board also approved amendments to the Settlement Regulations. These include, "promoters to be included along with the Principal Officer for the purpose of calculation of the base amount in terms of Table X of Schedule II; Base Amount for alleged defaults relating to open offer violations, where the making of the open offer has become infructuous, to be rationalised and benchmark for certain Base Amount in Schedule II to be suitably amended; In order to save time, instead of issuing settlement notice under Regulation 18, a paragraph shall be included in the show cause notice, informing the noticee about the option to file a settlement application; etc"

The Board has decided to provide an additional option to the existing pricing methodology for preferential issuance as under:
 

i. In case of frequently traded shares, the price of the equity shares to be allotted pursuant to the preferential issue shall be not less than higher of the following:

• a. the average of the weekly high and low of the volume weighted average price of the related equity shares quoted on the recognised stock exchange during the twelve weeks preceding the relevant date; or
• b. the average of the weekly high and low of the volume weighted average prices of the related equity shares quoted on a recognised stock exchange during the two weeks preceding the relevant date.

ii. The specified securities allotted on preferential basis using the above pricing formula shall be locked-in for a period of three years.
 

The board also approved Sebi's Annual Report for 2019-20.