The Securities and Exchange Board of India (SEBI) panel, headed by former chief justice of India N. K. Sodhi, has suggested that trades by promoters, employees, directors and their immediate relatives would need to be disclosed internally to the company.
The panel on insider trading also recommended that trades within a calendar quarter of a value beyond Rs. 10 lakh (or such other amount as the capital market regulator may specify) would be required to be disclosed to the stock exchanges.
Code of fair disclosure
Every entity that has issued securities which are listed on a stock exchange or which are intended to be listed would be required to formulate and publish a code of fair disclosure governing disclosure of events and circumstances that would impact price discovery of its securities,” said SEBI anel Prescribes in a press release on Wednesday.
The Justice Sodhi Committee on Insider Trading Regulations has made a range of recommendations to the legal framework for prohibition of insider trading in India and has focused on making this area of regulation more predictable, precise and clear by suggesting a combination of principles-based regulations and rules that are backed by principles.
The Committee has also suggested that each regulatory provision may be backed by a note on legislative intent.
While enlarging the definition of “insider”, the term “connected person” has been defined more clearly and immediate relatives are presumed to be connected persons, with a right to rebut the presumption. The term “immediate relative” would cover close relatives who are either financially dependent or consult an insider in connection with trading in securities.
The panel on insider trading also recommended that trades within a calendar quarter of a value beyond Rs. 10 lakh (or such other amount as the capital market regulator may specify) would be required to be disclosed to the stock exchanges.
Code of fair disclosure
Every entity that has issued securities which are listed on a stock exchange or which are intended to be listed would be required to formulate and publish a code of fair disclosure governing disclosure of events and circumstances that would impact price discovery of its securities,” said SEBI anel Prescribes in a press release on Wednesday.
The Justice Sodhi Committee on Insider Trading Regulations has made a range of recommendations to the legal framework for prohibition of insider trading in India and has focused on making this area of regulation more predictable, precise and clear by suggesting a combination of principles-based regulations and rules that are backed by principles.
The Committee has also suggested that each regulatory provision may be backed by a note on legislative intent.
While enlarging the definition of “insider”, the term “connected person” has been defined more clearly and immediate relatives are presumed to be connected persons, with a right to rebut the presumption. The term “immediate relative” would cover close relatives who are either financially dependent or consult an insider in connection with trading in securities.
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