Securities and Exchange Board of India (SEBI) has amended its insider trading norms.
With this, SEBI has allowed more flexibility for executing trading plans. The new norms will become applicable after three months.
The amendments include a reduction of the cool-off period for trading plans from six months to 120 days.
SEBI has provided for a 20 per cent price range for buying or selling shares.
If the compliance officer approves the insider’s trading plan, they are permitted to trade in the company’s securities under the Prohibition of Insider Trading (PIT) regulations.
A six-month cooling-off period is allowed for trading plans starting from the time of public notice. This time has been shortened to 120 days.
Insiders are typically senior management and key personnel who possess access to undisclosed price-sensitive information.
Insiders are required to provide a “trading plan” in advance that includes the share price, amount, and transaction date.
Insiders now have the option to not execute trades if the execution price exceeds the trading plan’s upper limit.
On non-implementation, they must notify the company’s compliance officer within two trading days of the trading plan’s end, along with reasons and any necessary documentation.
