SEBI SDD Compliance isn’t just a regulatory recommendation—it’s a strict obligation. For organizations that deal with Unpublished Price Sensitive Information (UPSI), understanding the Structured Digital Database (SDD) framework is not optional. It’s the very backbone of lawful communication within the capital markets.
Why? Because SEBI (Securities and Exchange Board of India) mandates that every interaction involving UPSI must be recorded—securely, immutably, and in real time. This is especially crucial in today’s fast-paced corporate world, where a single slip-up can lead to severe legal consequences, including fines, brand devaluation, and blacklisting.
What Is SEBI SDD Compliance?
SEBI SDD Compliance refers to the legal requirement under SEBI’s Insider Trading (Amendment) Regulations for listed companies to maintain a Structured Digital Database. This database must chronologically log every communication of UPSI along with details of Designated Persons and Insiders involved.
The Legal Framework Behind SEBI SDD
Under Regulation 3(5) of the SEBI (Prohibition of Insider Trading) Regulations, 2015, every listed entity must maintain a non-tamperable digital log of UPSI. It must:
- Be time-stamped
- Be audit-traceable
- Include names of the recipient and sender
- Be accessible to the compliance officer
Why Is SEBI SDD Compliance Mandatory?
Because it’s enforceable by law. SEBI uses the SDD to monitor how confidential market-moving information flows. Without it, companies may unknowingly allow insider trading, breach fiduciary responsibilities, or violate investor trust.
Non-Compliance Isn’t Just Risky—It’s Punishable
Failing to comply with SDD requirements can result in:
- Hefty Monetary Penalties
- Legal Prosecution Under SEBI Laws
- Public Tagging as “Non-Compliant” by NSE or BSE
- Reputational Damage That’s Hard to Recover From
Key Components of a Compliant SDD
A SEBI-compliant Structured Digital Database (SDD) must:
- Record every UPSI communication
- Log Designated Persons and Insiders
- Be non-editable and encrypted
- Be accessible only to the compliance officer
- Generate a comprehensive audit trail
Who Must Comply with SEBI SDD Rules?
All listed entities, intermediaries, and fiduciaries must maintain an SDD. This includes law firms, auditors, consultants, investment bankers, and other third-party vendors who might handle UPSI.
Common Mistakes in SEBI SDD Compliance
The common mistakes made when maintaining an SDD are:
- Logging communications retroactively
- Using editable databases like Excel or Google Sheets
- Lack of access control
- No audit mechanism in place
- Incomplete Designated Person records
The Role of Technology in Ensuring SEBI SDD Compliance
Manual record-keeping is no longer viable. Modern compliance software automates:
- Real-time tracking
- Immutable logging
- Instant notifications to compliance officers
- Easy access to audit trails
SEBI’s Expectation from Compliance Officers
A compliance officer must:
- Supervise SDD entries
- Ensure the data is complete and updated
- Be audit-ready 24/7
- Report discrepancies or breaches proactively
How To Create a SEBI-Compliant SDD
Follow these best practices:
- Use SDD-specific compliance tools
- Maintain user access logs
- Auto-generate data snapshots
- Use e-signatures to authenticate entries
- Training Your Team on SEBI SDD
- Avoiding Legal Gray Areas
- Use Real-Time Tracking of audit trails
- Maintain Time-Stamped and Tamper-Proof Records
- Include names of the recipient and sender
- Be accessible to the compliance officer
Consequences of Non-Compliance
- Financial Penalties
- Brand Damage You Can’t Undo
Automated SDD tools like InSiDDer can simplify tracking, auditing, and compliance—removing human error and ensuring seamless operation.
How InSiDDer by Legality Simplified Solves the SDD Compliance Requirement
InSiDDer, the SDD Tool is:
- Is 100% SEBI-aligned
- Automates UPSI tracking
- Provides real-time dashboards
- Delivers audit-ready reports instantly
BE AUDIT READY. BE COMPLIANT
