SEBI relaxes 'trading plan' norms for Insiders
SEBI recently notified SEBI (Prohibition of Insider Trading) (Second Amendment) Regulations, 2024 which provide flexibility in the “trading plan” that allows insiders to deal in their shares. Senior management and key officials who usually have access to unpublished price-sensitive information (UPSI) are considered to be insiders. According to regulations, they have a narrow window to carry out trades to avoid insider trading. These insiders have to give a ‘trading plan’ specifying the share price, amount, and transaction date in advance.
As per the amendments, minimum cool-off period between disclosure and implementation of the trading plan has been reduced from six months to four months. SEBI has also introduced a 20 percent price range for buying or selling shares in the trading plan and has provided the flexibility to insiders to not execute the trades if the execution price is outside the limit set by them in the trading plan.
However, on non-implementation, they will have to inform the company’s compliance officer within two trading days of the end of the trading plan with reasons and supporting documents.
