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.
