Aug. 23, 2019

The SEBI Board has approved the SEBI (Prohibition of Insider Trading) (Third Amendment) Regulations, 2019.

Salient features of the SEBI (Prohibition of Insider Trading) (Third Amendment) Regulations, 2019 are as follows: 

  • Informant: An informant means a person voluntarily submitting a form detailing credible, complete and original information relating to an act of insider trading.

  • Office of  Informant  Protection(‘OIP’):  An  independent  office shall be established by SEBI for receipt  and  registration  of  the Voluntary  Information  Disclosure  Form (‘VIDF’) and serve as a medium of exchange between the informant/legal representative and the Board.

  • Confidentiality of Informant: The confidentiality regarding the identity of the informant and information provided would be protected through the OIP.

  • Reward: Reward would be given in case the information provided leads to a disgorgement  of  at  least  Rupees  one crore. The  total  amount  of monetary  reward  shall  be 10  % of  the  money collected  but shall not exceed Rs one crore.

  • Investor Protection and Education Fund (‘IPEF’): IPEF shall be the designated fund from which the reward would be paid.

  • Exemption under  RTI: The original information provided by the informant shall be exempted from disclosure under section 8(1)(g) and 8(1)(h) of the Right to Information Act, 2005.

  • Protection against victimization: Market participants would be  required  to incorporate  in  their  Code  of  Conduct,  suitable provisions  to  ensure  that  no  employee  who  files  a  VIDF  is harassed, or discriminated against.

  • Vexatious or frivolous complaints: In case the OIP determines that the information submitted   is  frivolous   or   vexatious, SEBI may initiate appropriate action against the informant under the securities laws and any other applicable law.