By notification no. SEBI/LAD-NRO/GN/2020/23, dated July 17, 2020, the Securities and Exchange Board of India (“SEBI”) (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) were amended. In terms of clause 13 of schedule B (in case of listed companies) and clause 11 of schedule C (in case of intermediaries and fiduciaries), read with regulation 9 of the PIT Regulations, the listed companies, intermediaries and fiduciaries (“Informers”) are required to promptly inform the stock exchange(s) where the concerned securities are traded, regarding violations relating to the code of conduct (“CoC”) under the PIT Regulations (“Violations”), in such form and manner as may be prescribed.  

SEBI, vide circular no. SEBI/HO/ISD/ISD/CIR/P/2019/82, dated July 19, 2019, had specified the standard format for reporting of Violations. On July 23, 2020, SEBI issued a circular (“Circular”) about the reporting mechanism regarding violations relating to the CoC, under the PIT Regulations. The said format has been modified and placed at annexure A of the Circular, and the Informers are required to inform the stock exchange(s) about the Violations, as per the revised format.  

Further, the Circular also states that in terms of clause 12 of schedule B and clause 10 of schedule C, read with regulation 9 of the PIT Regulations, any amount collected by the Informers under these clauses for Violations, are required to be remitted to SEBI for credit to the Investor Protection and Education Fund (“IPEF”) administered by SEBI under the SEBI Act, 1992. As per regulation 4(2) of the SEBI (IPEF) Regulations, 2009, such amounts are required to be credited to the IPEF through the online mode or by way of a demand draft in favour of SEBI, payable at Mumbai. The exact bank details are also provided in the Circular.   

Please find a copy of the Circular here.

This update has been contributed by Adity Chaudhury (Partner) and Ishita Malhotra (Associate).