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11 Apr, 2025
The Securities and Exchange Board of India (SEBI) has revised its insider trading regulations, increasing flexibility for executing trading plans. These new norms will be effective in three months.
Under the PIT Regulations, insiders can trade in company securities if their trading plan is approved by the compliance officer, ensuring the plan is set before they possess unpublished price-sensitive information.
Regulation 5(2) previously required a six-month cool-off period for trading plans from the time of public disclosure. This has now been reduced to 120 days. Additionally, SEBI has introduced a 20% price range for buying or selling shares.
“Earlier, insiders had to specify the investment value or number of securities to be purchased. Now, they must also set a price limit within a 20% range,” said Sumit Kochar, Managing Partner at Dolce Vita Legal Advisors.
The listed entity’s code of conduct must include a period of at least six months during which a designated person permitted to trade cannot execute a contra trade, such as buying and selling on the same day.
“Previously, a contra trade was allowed under an approved Trading Plan. Now, the six-month restriction applies regardless of an approved trading plan,” Kochar added.
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