The Securities and Exchange Board of India (“SEBI”) on Wednesday, September 09, 2020 decided to extended the ambit of system driven disclosures, which were first introduced in December 2015, for members of Promoter Group and Designated Person(s) of a listed Company in addition to the existing ambit of Promoter(s) and Director(s) of such Companies (collectively referred as “Entities”).

The implemented system shall pertain to trading in equity shares and equity derivative instruments i.e. Futures and Options of the listed Company (wherever applicable) by the Entities.

Such automated disclosures would be disseminated to general public via websites of Stock Exchanges with effect from October 01, 2020 and accordingly the Depositories and Stock Exchanges will have to make necessary arrangements for implementation of such process.

It is further stated that the new system would continue to run parallel with the existing system, wherein Entities will continue to independently comply with the disclosure obligations under SEBI (Prohibition of Insider Trading) Regulations, 2015 as applicable to them, till March 31, 2021.

The disclosures generated through the system will be displayed separately from the regular disclosures filed with the Exchanges by the Companies.

Responsibilities of Listed Companies, Depositories and Stock Exchanges:

SEBI has specified process that needs to be followed for the implementation of the system. Accordingly, the responsibilities casts upon various parties are as follow:

• Responsibilities of Listed Companies
• To provide the information to the Designated Depositories such as PAN of the Entities in the format and manner prescribed. Further, for PAN exempt Entities, the investor’s Demat account number will be specified by the listed Company.
• Such information need to be provided within 10 days from the date of this circular.
• In case of any subsequent update in the details of the Entities, update the information with the Designated Depository on the same day.
• Responsibilities of Designated Depository
• To share the information received from the Listed Companies with other Depository.
• To tag such Demat accounts at ISIN level on the basis of PAN of first holder / Demat account numbers.
• To share the above information with the Stock Exchanges, company-wise details of Entities.
• To provide the data, as prescribed, pertaining to the tagged demat account(s) separately to the stock exchanges on a daily basis. (This shall include details of transactions for pledge/revocation/invocation of shares and other encumbrances such as NDU etc. of the entities, details of off market transactions of the entities, details of transmission of shares of the entities, details of corporate actions such as ESOPs, Bonus, Rights, etc. of the entities. Additionally, details of market transfers in case of PAN Exempt entities).
• Responsibilities of Stock Exchange
• To identify the transactions carried out by the Entities in the equities and equity derivative instruments of the Listed Company and to share such information with all other Stock Exchanges where Listed Company is listed on daily basis.
• To disseminate the disclosures on its website as and when triggered under Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015

In case of any discrepancy, the issue shall be resolved by Listed Company, Stock Exchanges and Depositories in coordination with one another.

To view SEBI circular: click here

For any discussion, please feel free to contact:

Mohini Varshneya
Partner & Head – ESOP Services
Corporate Professionals Capital Private Limited
SEBI Registered (Category-I) Merchant Banker
E: mohini@indiacp.com
M: +91 9971673332