SEBI AMENDS THE PIT REGULATIONS TO EXPAND THE DEFINITION OF 'UPSI'
Securities and Exchange Board of India ("SEBI"), vide its notification dated March 11, 2025 (published on March 12, 2025), has notified the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2025 ("PIT Amendment Regulations"), thereby amending the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"). The PIT Amendment Regulations shall come into force on the 90th day from the date of its publication in the e-gazette.
By way of the PIT Amendment Regulations, SEBI has expanded the definition of 'unpublished price sensitive information' ("UPSI"). The following information have been added in the definition of UPSI: (a) award or termination of order/ contracts not in the normal course of business; (b) change in rating(s), other than ESG rating(s); (c) fund raising proposed to be undertaken; (d) agreements, by whatever name called, which may impact the management or control of the company; (e) fraud or defaults by the company, its promoter, director, key managerial personnel ("KMP") or subsidiary or arrest of KMP, promoter or director of the company, whether occurred within India or abroad; (f) resolution plan/ restructuring or one time settlement in relation to loans/ borrowings from banks/ financial institutions; (g) admission of winding up petitions (filed by any party/ creditors) and admission of application by the National Company Law Tribunal for initiation of corporate insolvency resolution process against the company as a corporate debtor, approval/ rejection of resolution plan; (h) initiation of forensic audit, by whatever name called, by the company or any other entity for detecting mis-statement in financials, misappropriation/ siphoning or diversion of funds and receipt of final forensic audit report; (i) actions initiated or orders passed within India or abroad, by any regulatory, statutory, enforcement authority or judicial body against the company or its directors, KMP, promoter or subsidiary, in relation to the company; (j) outcome of any litigation or dispute which may have an impact on the company; (k) giving of guarantee or indemnity or becoming a surety, by whatever name called, for any third party, by the company not in the normal course of business; and (l) granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals.
Following are certain other amendments introduced by the PIT Amendment Regulations:
- Any information related to changes in KMP is deemed to be UPSI. However, pursuant to the PIT Amendment Regulations, such change shall not be considered UPSI in case of superannuation or term completion;
- The entry of information, originating from outside the organization, in the structured digital database must be completed within 2 calendar days of receiving such information; and
- Trading window may not be closed for UPSI emanating outside the concerned listed company. To read the PIT Amendment Regulations click here.
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