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Securities and Exchange Board of India (Prohibition of Insider Trading) (Third Amendment) Regulations, 2019
- In order to ensure reporting of violations under insider trading laws, for further examination and initiation of necessary action, SEBI has introduced “Chapter III A” through the Securities and Exchange Board of India (Prohibition of Insider Trading) (Third Amendment) Regulations, 2019 dealing with Informant Policy in relation to Insider Trading Laws effective from 26th December, 2019.
- As per the provisions of the Regulations, the Informant is required to submit original information pertaining to any violation of insider trading laws to the Office of Informant Protection (OIP) by furnishing the Voluntary Information Disclosure (VID) Form. The Office of Informant Protection is responsible for receiving, registering and maintaining the confidentiality of the information submitted.
- The Office of Informant Protection, upon the receipt of the information, shall communicate the substance of the information along with the evidence, to the relevant department or division of the board for further examination and initiation of necessary action, if any.
- If the department based on the information provided collects or detects substantial recovery, the board may at its sole discretion, declare an informant eligible for the reward. The amount of the reward shall be 10% of the monetary sanctions collected or recovered but shall not exceed rupees 1 crore. The Board may if deemed fit grant an interim reward not exceeding rupees 10 lacs to the informant.
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