Recent amendments to SEBI (Prohibition of Insider Trading) Regulations, 2015, provided, among others, that continual disclosures under Regulation 7 of the PIT Regulations by the promoter or any other connected person or director would be made in the manner prescribed by the Board. Accordingly, SEBI has decided to implement the system driven disclosures for members of the promoter group and designated persons, in addition to the promoters and directors of the company (collectively “the entities”). Under this system, the Depositories provide the transaction data of promoter/promoter group/directors on a daily basis directly to the stock exchanges for dissemination of the disclosures on their websites.

In the first phase, the system driven disclosures will pertain to trading in equity shares and equity derivative instruments i.e. Futures and Options of the listed company by the entities. The Depositories and Stock Exchanges are required to make arrangements so that disclosures pertaining to PIT Regulations are made available on the respective stock exchanges with effect from 1 October 2020. This system will run parallel to the existing system where entities continue to independently comply with disclosure obligations under the PIT Regulations as applicable to them, up to 31 March 2021. Further, the disclosures generated through this system will be displayed separately from the regular disclosures filed with the exchanges.

The implementation of the system driven disclosures, include various steps – the depositories and exchanges will agree upon standardised formats for sharing of data. Companies are required to share PAN numbers of the entities or DMAT accounts in case of PAN exempted entities with the depository within 10 days of this circular. Subsequent changes to this information must be shared on the same day. Such information will be shared by the depository with other depositories. The depository will tag the DMAT accounts in their depository systems at ISIN level. The designated depository will share company-wise details of entities/DMAT accounts with the stock exchanges on a daily basis via a system interface. The depository will provide data of transactions such as pledge, revocation, invocation of encumbrances, off-market transactions, transmission of shares, corporate actions such as ESOPs, bonus, rights of the entities to the stock exchanges. The stock exchanges will identify the transactions carried out on their trading system of the equity and equity derivative instruments of the listed company permitted to trade and will share this information with other stock exchanges. Once all such information derived through depositories and stock exchanges is consolidated, if it is found to trigger Regulation 7(2), it will be disseminated on the websites of the stock exchanges within T+2 days.

To refer to the SEBI circular dated 9 September 2020, click here. This circular supercedes earlier circulars on implementation of system driven disclosures dated 1 December 2015, 21 December 2016 and 28 May 2018.