SEBI proposes flexibility in framework relating to 'trading plans' under Insider Trading rules
In a consultation paper, the SEBI has suggested provisions to give more flexibility to trading plans (TPs) under the SEBI (Prohibition of Insider Trading) Regulations 2015. TPs were introduced to help people who are constantly in possession of unpublished price-sensitive information (UPSI) such as KMPs or other senior management. But since the introduction of the TPs, the market feedback has been that the requirements are onerous to meet and therefore TPs weren't popular, according to the consultation paper.
Subsequently, SEBI set up a Working Group to review the TP provisions. One of the suggestions was on the disclosure of personal details of insiders in TP. To strike a balance between respecting the privacy of the insider and preventing misuse by the insider, the group has suggested that the insider makes two separate disclosures of the TP. One will have all the details and that will be filed confidentially with the exchanges. The other will be disclosure without the personal details to the public through the stock exchange.
The group has submitted various proposals such as reducing the minimum cool-off period between disclosure of TP and implementation of TP to four months from six months; reducing the minimum coverage period to two months from twelve months; and doing away with the black-out period for trading in TP, among other things.
Comments on the Consultation paper are invited by 15th December, 2023.
