INSUBCONTINENT EXCLUSIVE:
These insiders are not just required to reveal their own sensitive personal data but are also required to find out the annual income of
their relatives to make appropriate disclosures.
A material financial relationship is the one where the insider has received or paid any
money to anyone that is more than 25 per cent of his last one-year earnings
than 25 per cent of the income of the person who is a party to the transaction
Hence, the insiders of a company will have to find out the financial information of their relatives and friends with whom they have
several implementation challenges with the law
for the details of third parties, Sebi should have kept the responsibility limited to the designated persons
These are the people who have reasonable access to price sensitive information
The list could include promoters of the company, board members, and other key functionaries.
Even some of the lowerrung employees who work
in departments like software maintenance could be placed in the list if they have access to insider information
All the designated persons are expected to meet the compliance requirements specified under insider trading which includes disclosure of
information such as annual income of people in order to determine whether they ought to disclose details of such persons to their
be the authenticity of data
The top corporate bosses are worried they could be made liable if any of the data pertaining to the income of their relatives is found
Further, the listed companies have also been asked to maintain structured digital database with details of all the people who had access to
unpublished price sensitive information (UPSI).
The market regulator has brought in material financial relationship to help crack cases
where an insider may have funded an unconnected person to trade on his behalf.
Sebi notified these new insider trading regulations on
These were based on the recommendations of a committee on fair market access.
The increased compliance requirements are aimed at increasing
accountability and curbing any leak of UPSI
The issue came to focus last year when the quarterly results of several blue-chip companies were leaked over social media platforms such as
