TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2022.
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.... of Insider Trading) Regulations, 2015,- I. in regulation 2, i. in sub-regulation (1), a. in clause (i), the words "except units of a mutual fund" shall be omitted. b. in clause (l), after the word and symbol "subscribing," and before the word "buying" the words and symbol "redeeming, switching," shall be inserted and after the word and symbol "subscribe," and before the word "buy", the words and symbol "redeem, switch," shall be inserted. II. in regulation 7A, in clause (d), i. in sub-clause (iv), the word "and" shall be omitted. ii. After sub-clause (iv) and before sub-clause (v), the following sub-clause shall be inserted, namely,- "iv(a) regulations 5A to 5G of these regulations; and" III. after Chapter II and before Chapter III, the following Chapter shall be inserted, namely,- "CHAPTER - II A RESTRICTIONS ON COMMUNICATION IN RELATION TO AND TRADING BY INSIDERS IN THE UNITS OF MUTUAL FUNDS. Applicability 5A. (1) The provisions of this Chapter shall apply only in relation to the units of a mutual fund. (2) All the provisions of Chapter II....
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.... or (g) an official of a stock exchange for dissemination of information; or (h) Directors or employees of auditor, legal advisor or consultants of the mutual fund or asset management company who have access or are reasonably expected to have access to unpublished price sensitive information relating to a mutual fund scheme or its units in the course of business operation; or (i) an intermediary as specified in section 12 of the Act or an employee or director thereof who have access or are reasonably expected to have access to unpublished price sensitive information relating to a mutual fund scheme or its units in the course of business operations; or (j) a banker of the mutual fund or asset management company; or (k) a concern, firm, trust, HUF, company or association of persons wherein a director of an asset management company and Trustees or his immediate relative or banker of the company, has more than ten per cent of the holding or interest; (c) "generally available information" means information that is made available to the unitholders or made accessible to the public on a non-....
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....sensitive information to any person including other insiders except where such communication is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations. NOTE: This provision is intended to cast an obligation on all insiders who are essentially persons in possession of unpublished price sensitive information to handle such information with care and to deal with the information with them when transacting their business strictly on a need to- know basis. It is also intended to lead to organisations developing practices based on need-to-know principles for treatment of information in their possession. (2) No person shall procure from or cause the communication by any insider of unpublished price sensitive information, except in furtherance of legitimate purposes, performance of duties or discharge of legal obligations. NOTE: This provision is intended to impose a prohibition on unlawfully procuring possession of unpublished price sensitive information. Inducement and procurement of unpublished price sensitive information not in furtherance of one's legitimate duties a....
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....ing of the database. (7) The board of directors or head(s) of the organisation of every person required to handle unpublished price sensitive information shall ensure that the structured digital database is preserved for a period of not less than eight years after completion of the relevant transactions and in the event of receipt of any information from the Board regarding any investigation or enforcement proceedings, the relevant information in the structured digital database shall be preserved till the completion of such proceedings. Trading when in possession of unpublished price sensitive information. 5D. (1) No insider shall trade in the units of a scheme of a mutual fund, when in possession of unpublished price sensitive information, which may have a material impact on the net asset value of a scheme or may have a material impact on the interest of the unit holders of the scheme: Explanation -The dealings of a person in the units of a mutual fund when in possession of unpublished price sensitive information, shall be presumed to have been motivated by the knowledge and awareness of such informat....
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....arterly basis thereafter, disclose the details of holdings in the units of its mutual fund schemes, on an aggregated basis, held by the Designated Persons of asset management company, trustees and their immediate relatives on the platform of Stock Exchanges or in any other manner as may be specified by the Board. (2) Details of all the transactions in the units of its own mutual funds, above such thresholds as may be specified by the Board, executed by the Designated Persons of asset management company, trustees and their immediate relatives shall be reported by the concerned person to the Compliance Officer of asset management company within two business days from the date of transaction: Provided that with respect to systematic transactions through any mutual fund scheme, Designated Persons may report the same only at the time of making the first installment of the transaction along with the period of such transaction and on modifications thereof, if any: Provided further that no reporting is required if such transaction was pursuant to a. subscription/investment in the mutual fund units pursuant to m....
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....rred to as "fiduciaries" for the purpose of Schedule C of these regulations. (3) Every asset management company, intermediary and other persons formulating a code of conduct shall identify and designate a compliance officer to administer the code of conduct and other requirements under these regulations. Designated Person 5G. (1)The board of directors of the asset management company and trustees shall in consultation with the compliance officer specify the Designated Persons to be covered by the code of conduct on the basis of their role and function in the organisation and the access that such role and function would provide to unpublished price sensitive information in addition to seniority and professional designation and shall include: i. Head of the asset management company (designated as Chief Executive Officer/Managing Director/President or by any other name), ii. Directors of the asset management company or the trustee company, iii. Chief Investment Officer, Chief Risk Officer, Chief Operation Officer, Chief Information Security Officer, Fund Managers, Dealers, Research Analysts, all e....
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....he organisation of intermediaries and fiduciaries, shall also ensure that the Chief Executive Officer or the Managing Director or such other analogous person complies with these regulations. (3) The Audit Committee of an asset management company or such other analogous body of an intermediary or fiduciary shall review compliance with the provisions of these regulations at least once in a financial year and shall verify that the systems for internal control are adequate and are operating effectively. (4) Every asset management company shall with the approval of the trustees formulate written policies and procedures for inquiry in case of leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information and accordingly initiate appropriate inquiries on such leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information and promptly inform the Board promptly of such leaks, inquiries and result of such inquiries. (5) An asset management company shall with the approval of the trustees have a whistle-blower policy that ....
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....uch time, any requests to transact in the units of the mutual funds by the Designated Persons and/or their immediate relatives shall not be processed by the asset management company. (2) The closure period restrictions mentioned in sub-clause (1) shall not apply in respect of transactions specified in clauses (i) to (iii) of the proviso to sub-regulation (1) of regulation 5D and in respect to the pledge of mutual fund units for a bonafide purpose, subject to pre-clearance by the compliance officer and compliance with the other requirements, if any, as may be specified by the Board. 5. The timing for re-opening of the closure period shall be determined by the compliance officer taking into account various factors including the unpublished price sensitive information in question becoming generally available and being capable of assimilation by the market. 6. When the closure period is not applicable, trading in the mutual fund units by Designated Persons and their immediate relatives including at the time of initiation of systematic transactions shall be subject to pre-clearance by the compliance officer, if....
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....shall not be applicable for Overnight Schemes. 10. The code of conduct shall also stipulate such formats as the board of directors deem necessary for making applications for reporting of trades executed and for reporting level of holdings in units of mutual funds at such intervals as may be determined as being necessary to monitor compliance with these regulations. 11. The code of conduct shall stipulate the internal sanctions and disciplinary actions, including wage freeze, suspension, recovery, etc., that may be imposed by the asset management company for the contravention of the code of conduct. Any amount collected under this clause shall be disgorged by the asset management company and credited under intimation to the Board, to the Investor Protection and Education Fund established by the Board under the Act. 12. The code of conduct shall specify that in case it is observed by the asset management company that there has been a violation of these regulations, it shall promptly inform to the stock exchange(s), in such form and such manner as may be specified by the Board from time to time. 13. ....