Insider trading is the trading of a Listed company’s stock or other securities based on Unpublished Price Sensitive Information (UPSI) about the company. As a measure to prevent insider trading, SEBI, the securities market regulator, through its regulations, prohibits the communication of UPSI; except in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.
In the recent years, as the need to regulate the persons handling and possessing UPSI became critical to prevent & prosecute insider trading acts, SEBI introduced significant amendments to enhance compliance related to prevention of Insider Trading.
To this effect the requirement for maintenance of Structured Digital Database has been introduced to create a database of such persons or entities with whom UPSI is shared.
Such requirement of maintenance of Structured Digital Database (SDD) under the SEBI (Prohibition of Insider Trading) Regulations, 2015 is not limited to only Listed Company but also extended to Intermediaries and Fiduciaries who due to nature of their roles and functions routinely gain access to various Unpublished Price Sensitive Information (UPSI) related to listed entities and their securities as part of their ordinary course of business.
