Sebi eases trading norms for company insiders

Mumbai, Jun 27, 2024

Synopsis
"Insider may make adjustments, with the approval of the compliance officer, in the number of securities and price limit in the event of corporate actions related to bonus issue and stock split occurring after the approval of trading plan and the same shall be notified on the stock exchanges on which securities are listed," Sebi said .

The Securities and Exchange Board of India (Sebi) has given flexibility to senior executives of listed companies relating to their trading plans under insider trading norms. The regulator has reduced the minimum cool-off period between disclosure and implementation of trading plan to four months from six months.

It has allowed flexibility during formulation of trading plan, to provide price limits - upper price limits for buy trades and lower price limits for sell trades.

The regulator has provided a 20 % price range for buying or selling of shares in the trading plan.

"Insider may make adjustments, with the approval of the compliance officer, in the number of securities and price limit in the event of corporate actions related to bonus issue and stock split occurring after the approval of trading plan and the same shall be notified on the stock exchanges on which securities are listed," Sebi said .

Sebi said in case of non-implementation of trading plan, the insider should inform about it to compliance officer within two trading days with reasons.

The regulator proposed changes to trading plans after it received market feedback that the current rules on trading plans were onerous and not very popular. It said senior executives or key managerial personnel, have a very small window for carrying out their trades, due to being in possession of inside information most of the time, coupled with mandatory trading window closures for financial results.

[The Economic Times]