SEBI’s Board Meeting Decisions: A move towards ensuring lucidity in the Regime
The Securities and Exchange Board of India (SEBI), in its Board Meeting held on 19th November 2014 has taken many a decisions to tighten the noose against the wilful defaulters and the wrong doers. SEBI is all set to match the international practices and not let go any wrong doer, who gets undue benefit or attempts to get any undue benefit from the genuine and innocent investors.
SEBI broadly took the following decisions, which can reap better benefits for the investors’ community and the small shareholders:
- Review of the 22 year old Insider Trading Regulations: The said Regulations were promulgated in 1992 and over the years, the capital markets scenario has changed a lot, so this overhauling is a welcome move;
- Insiders’ definition to be widened: It is proposed to include not just the employees, but also contractual employees and intermediaries within the ambit: Now, these intermediaries would not be able to take the excuse that they do not fall within the definition of insider and if they traded on the basis of any unpublished price sensitive information, they would be held liable;
- Insiders to formulate pre scheduled trading plans, to be duly disclosed to the Stock Exchanges: This will be allowed for genuine and bona fide transactions.
- Burden of proof that the concerned Noticee was not in possession of any unpublished price sensitive information, shall be on the Noticee: That is to say, now, it will be for such persons to prove that while doing the trade, they were not in possession of any unpublished price sensitive information.
- Clarity as to what would tantamount unpublished price sensitive information (UPSI): It is proposed to link it with listing agreement thereby widening the ambit of price sensitive information.