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SEBI, vide notification dated June 25, 2024, has issued the SEBI (Prohibition of Insider Trading) (Second Amendment) Regulations, 2024 amending the SEBI (Prohibition of Insider Trading) Regulations, 2015. Some of the key amendments are as follows:
- the trading plan formulated by an insider must not entail commencement of trading on behalf of the insider earlier than 120 (one hundred and twenty) calendar days (earlier this was 6 (six) months) from the public disclosure of the plan;
- the trading plan must set out the prescribed parameters for each trade to be executed, which must include either the value of the trade or the number of securities to be traded, the nature of trade, either specific date or time period (not exceeding 5 (five) consecutive trading days) (while previously the intervals at, or dates on which such trades would be effected was also required to be set out) and the price limit(which is an upper price limit for a buy trade and a lower price limit for a sell trade). If such price limit is set, the insider must execute the trade only if the execution price is within such limit and must not execute the trade if price is outside such limit; and
- the compliance officer must approve or reject the trading plan within 2 (two) trading days (earlier this was not prescribed) of receipt of the trading plan and notify the approved plan to the stock exchanges on which the securities are listed, on the day of approval.
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