SEBI amendment on Prohibition of Insider Trading Regulations

Time and again SEBI has been giving a very direct message on how serious the regulator is about the compliance of Insider Trading Regulations and maintaining of Digital Database for Unpublished Price Sensitive Information. 

To make things clear and put the onus on the Board of Directors SEBI has come out with new amendment called as SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF INSIDER TRADING) (AMENDMENT) REGULATIONS, 2020

In our view the amendments make it very clear and our reading of the amendment suggests the following :

  1. Responsibility of maintaining Digital Database for Unpublished Price Sensitive Information (UPSI) remains with the Board of Directors. 
  2. Digital databases should be comprehensive and contain detailed information about UPSI’s and the sharing of UPSI’s.
  3. Digital Database should not be outsourced and shall be maintained internally with adequate internal controls and checks such as time stamping and audit trails to ensure the non-tampering of the database. So a ready solution on-cloud will not meet the requirement. It may end-up being non-compliance
  4. Digital Database needs to be preserved for eight years after completion of the relevant transactions and in the event of receipt of any information from the Board regarding any investigation or enforcement proceedings, the relevant information in the structured digital database shall be preserved till the completion of such proceedings.
  5. Any violation of regulation observed by intermediary or fiduciary, such violation is required to be informed to Stock Exchange(s)

Please feel free to reach out to us at connect@volody.in if you require any clarification regarding the interpretation of the said amendment. Volody Insider Trading Compliance Software meets all the requirements of SEBI Digital Database Regulation and we enable hosting on your server, provide you with necessary audit trail, date & time stamp and allow maintenance of data for the number of years you are looking for. 

Considering stringent rules and possible financial penalty, reputation loss its critical to go for a fully compliant tailor-made solution.