Sebi cracks the whip on insider trading, moots new norms

MUMBAI: The Securities and Exchange Board of India (Sebi) mooted a reduction in the deadline for disclosing price-sensitive information such as change in shareholding, voting rights etc.

Any acquisition or sale of shares may be disclosed within two days of the trade instead of 9 now, if the proposal is notified.

Sebi on Monday said the amendments were suggested because "in order to have an efficient market, it is essential that all relevant information which has an impact on the price of the shares of a company is promptly disseminated to the market."

So the director or major shareholder or a person exposed to essential information will have to inform the company within one working day of trading the shares or getting a confirmation of the transaction being completed.  The company, in
turn, would be given another working day to inform the exchanges.

Currently an insider gets 4 working days to disclose, while the company is given 5.

The rationale for the said disclosure is diluted over the 9 days provided for it said the Sebi consultative paper on amendments to SEBI (Prohibition of Insider Trading) Regulations, 1992.