SEBI has issued Consultation paper on providing flexibility in provisions relating to ‘Trading Plans’ under the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Working Group submitted its recommendations to SEBI, proposing several amendments to the existing regulations:
- Cool-off Period Reduction: Recommends reducing the minimum cool-off period between TP disclosure and implementation from six months to four months.
- Minimum Coverage Period: Suggests reducing the minimum coverage period requirement from twelve months to two months.
- Elimination of Black-out Period: Proposes doing away with the black-out period requirement for trading in TP.
- Price Limits for Insider Protection: Introduces flexibility for insiders to set price limits (+/-20% of closing price) during TP formulation, preventing execution if the security’s price exceeds the set limits.
- Contra-trade Restrictions: Recommends removing the provision exempting TP trades from contra-trade restrictions, making these restrictions applicable to TP trades as well.
- Timeline for TP Disclosure: Proposes disclosing TP to stock exchanges within two days of TP approval.
- Format for Reporting TP Details: Suggests specifying a suitable format for reporting TP details in consultation with market participants.
Disclosure of Personal Details in TP:
The Working Group considered the disclosure of personal details of insiders in TP and explored alternatives. It recommends continuing the existing practice of disclosing personal details (Name, Designation, PAN) to stock exchanges, citing the need for informed decision-making and monitoring TP execution. However, to address privacy concerns, a novel alternative is proposed—making two separate disclosures: one with personal details to stock exchanges (confidential) and another without personal details to the public.
