INSIDER TRADING

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.