BSE has issued FAQs on Framework for restricting trading by Designated Persons by freezing PAN at security level

BSE has issued FAQs on Framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level. The Bombay Stock Exchange (BSE) has implemented several measures to regulate trading activities, one of which is the Trading Window Closure Period (TWCP). To shed light on this internal process, let’s delve into some frequently asked questions about BSE’s TWCP:

  1. Who can update the Trading window closure period? Currently, only the NIFTY 50 / SENSEX 30 and TOP 2000 companies, as per BSE market capitalization for the quarter ending December 2023, have the authority. This will be extended to all listed companies from April 1, 2024.
  2. Do issuers need to update member details to depositories again for the TWCP? No, the member/designated person (DP) data already uploaded for System Driven Disclosure (SDD) purposes will be automatically populated for updating the TWCP in the system.
  3. Can issuers enter data in the last week of September if the depositories’ system becomes effective from October 1, 2023? Yes, issuers can enter the TWCP dates until T-2 days of the respective dates.
  4. Is the end date modifiable in the depositories system? Yes, the end date is modifiable. Initially, a notional end date can be set, and it can be modified once the board meeting date is decided, based on T-2 days.
  5. Can pledge invoke happen during the PAN freeze tenure? No, pledge invoking is not allowed during the PAN freeze tenure unless the pledge is marked before the trading window closure period.
  6. Will freezing PAN affect immediate relatives? Freezing is done based on PAN – ISIN level basis, including immediate relatives, if their PANs are uploaded in the SDD data for designated depository participants.
  7. Is TWCP process applicable to ISIN other than equity? Currently, the TWCP is only applicable to equity ISINs.
  8. When does the framework for freezing PAN become applicable for companies migrating from SME segment to the Main Board? For companies migrating during a quarter, the PAN of designated persons shall be frozen from subsequent quarters.
  9. What measures should a company take regarding open positions of DPs in the derivative segment? All open positions in the derivative segment should be squared off before the commencement of the TWCP.
  10. Is the framework for freezing PAN applicable to SME Board listed companies? Yes, it is applicable to SME Board listed companies based on half-yearly or quarterly financial results submission.