Framework to Freeze PAN of Designated Persons During ‘Trading Window Closure Period’ to be Extended to all Listed Cos. | SEBI
- Blog|News|Company Law|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 21 July, 2023
Latest from Taxmann
Circular No. SEBI/HO/ISD/ISD-PoD-2/P/CIR/2023/124, Dated: 19.07.2023
SEBI has extended the framework to freeze the permanent account number (PAN) of Designated Persons (DPs) during the “trading window closure” for financial results at the security level for all listed companies in a phased manner.
This amendment outlines the provisions of Clause 4 of Schedule B read with Regulation 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015, which govern the trading activities of DPs.
Clause 4(1) of Schedule B read with Regulation 9 of PIT Regulations states that the trading window should be closed when the compliance officer determines that a designated person or class of designated persons can be expected to have possession of Unpublished Price Sensitive Information (UPSI).
Such closure shall be imposed in relation to such securities to which such UPSI relates. Designated persons and their immediate relatives should not trade in securities when the trading window is closed.
Additionally, Clause 4 (2) of Schedule B read with Regulation 9 of PIT Regulations states that
“Trading restriction period shall be made applicable from the end of every quarter till 48 hours after the declaration of financial results”.
In order to improve ease of doing business and to prevent inadvertent non-compliances of provisions of the PIT Regulations by DPs, the SEBI vide Circular SEBI/HO/ISD/ISD-SEC-4/P/CIR/2022/107 dated August 05, 2022, laid down a framework for developing a system to restrict the trading activities by Designated Persons (DPs) by freezing their PAN at the security level during the trading window closure period.
Presently, this framework applies only to listed companies that are part of benchmark indices like NIFTY 50 & SENSEX. However, from October 1, 2023, the framework will be extended to the top 1000 companies in terms of BSE Market Capitalization, and then to the next 1000 companies from 01.01.2024 & remaining companies from 01.04.2024.
This move aimed at preventing inadvertent trading by designated persons during the trading window period, ensuring fair and compliant practices in the Indian stock market.
Click Here To Read The Full Circular
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
