SEBI’S PROPOSED CHANGES TO INSIDER TRADING PROVISIONS
Why in the News?
- The SEBI has put forth proposals to ease insider trading regulations, allowing company insiders with unpublished price-sensitive information to engage in securities trading.
- Currently, SEBI permits senior management personnel to trade under the trading plan framework introduced in 2015, but the regulator believes this approach is not widely adopted due to onerous regulatory requirements.
Proposed Relaxations:
- Cooling-off Period Reduction:
- Reduce the minimum cooling-off period between plan disclosure and implementation from six to four months.
- Eliminate the blackout period.
- Coverage Period:
- Shorten the minimum coverage period from twelve to two months.
- Flexibility for Insiders:
- Allow insiders to set upper price limits for buy trades and lower limits for sell trades within +/-20% of the closing price on the plan submission date.
- Disclosures:
- Mandate disclosure of trading plans to stock exchanges within two days of approval.
- Separate filings for stock exchange (with personal details) and public (without personal details).
Feedback and Deadline:
SEBI invites comments on these proposals until December 15. The recommendations aim to simplify the trading plan framework, making it more accessible for company insiders navigating regulatory complexities.