Chapter for restrictions on communication in relation to and trading by insiders in the units of mutual funds introduced vide SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2022

SEBI

   

On 24-11-2022, the Securities and Exchange Board of India (‘SEBI’) has issued the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2022 to further amend the SEBI (Prohibition of Insider Trading) Regulations, 2015.

Key Points:

  1. Chapter- II A has been inserted which emphasizes restrictions on communication in relation to and trading by insiders in the units of mutual funds.

  2. Further, it has been directed that all the provisions of Chapter IIIA and V will apply only to the units of mutual funds.

  3. It has been directed that no insider is allowed to communicate, provide or allow access to any unpublished price sensitive information to any person, including other insiders.

  4. The only exception to provide price sensitive information to other insiders is when it is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.

  5. It has been also directed that a structured digital database should be maintained containing the nature of unpublished price sensitive information and the names of such persons who have shared the information and the names of such persons with whom information is shared along with the Permanent Account Number.

  6. It has been directed that such a database should not be outsourced.


*Kriti Kumar, Editorial Assistant has reported this brief.

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