Regulation 2 - Definitions - Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

Definitions. 2. (1) In these regulations, unless the context otherwise requires, the following words, expressions and derivations therefrom shall have the meanings assigned to them as under: (a) Act means the Securities and Exchange Board of India Act, 1992 (15 of 1992); (b) Board means the Securities and Exchange Board of India; (c) compliance officer means any senior officer, designated so and reporting to the board of directors or head of the organization in case board is not there, who is financially literate and is capable of appreciating requirements for legal and regulatory compliance under these regulations and who shall be responsible for compliance of policies, procedures, maintenance of records, monitoring adherence to the rules for the preservation of unpublished price sensitive information, monitoring of trades and the implementation of the codes specified in these regulations under the overall supervision of the board of directors of the listed company or the head of an organization, as the case may be; 1 [Explanation For the purpose of this regulation, financially literate shall mean a person who has the ability to read and understand basic financial statements i.e. balance sheet, profit and loss account, and statement of cash flows. ] (d) connected person means,- 11 [ (i) any person who is or has been, during the six months prior to the concerned act, associated with a company, in any capacity, directly or indirectly, including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a director, officer or an employee of the company or holds any position including a professional or business relationship, whether temporary or permanent, with the company, that allows such a person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access. ] (ii) Without prejudice to the generality of the foregoing, the persons falling within the following categories shall be deemed to be connected persons unless the contrary is established, - (a). 12 [ a ] relative of connected persons specified in clause (i); or (b). a holding company or associate company or subsidiary company; or (c). an intermediary as specified in section 12 of the Act or an employee or director thereof; or (d). an investment company, trustee company, asset management company or an employee or director thereof; or (e). an official of a stock exchange or of clearing house or corporation; or (f). a member of board of trustees of a mutual fund or a member of the board of directors of the asset management company of a mutual fund or is an employee thereof; or (g). a member of the board of directors or an employee, of a public financial institution as defined in section 2 (72) of the Companies Act, 2013; or (h). an official or an employee of a self-regulatory organization recognised or authorized by the Board; or (i). a banker of the company; or (j). a concern, firm, trust, Hindu undivided family, company or association of persons wherein a director of a company or his 13 [ **** ] relative or banker of the company, has more than ten per cent. of the holding or interest; 14 [ or ] 15 [ (k). a firm or its partner or its employee in which a connected person specified in sub-clause (i) of clause (d) is also a partner; or (l). a person sharing household or residence with a connected person specified in sub-clause (i) of clause (d); ] NOTE: It is intended that a connected person is one who has a connection with the company that is expected to put him in possession of unpublished price sensitive information. 16 [ Relatives ] and other categories of persons specified above are also presumed to be connected persons but such a presumption is a deeming legal fiction and is rebuttable. This definition is also intended to bring into its ambit persons who may 17 [ **** ] seemingly 18 [ not ] occupy any position in a company but are in regular touch with the company and its officers and are involved in the know of the company s operations. It is intended to bring within its ambit those who would have access to or could access unpublished price sensitive information about any company or class of companies by virtue of any connection that would put them in possession of unpublished price sensitive information. (e) generally available information means information that is accessible to the public on a non-discriminatory basis 8 [ and shall not include unverified event or information reported in print or electronic media ] ; NOTE: It is intended to define what constitutes generally available information so that it is easier to crystallize and appreciate what 9 [ constitutes ] unpublished price sensitive information 10 [ **** ] . Information published on the website of a stock exchange, would ordinarily be considered generally available. (f) immediate relative means a spouse of a person, and includes parent, sibling, and child of such person or of the spouse, any of whom is either dependent financially on such person, or consults such person in taking decisions relating to trading in securities; 19 [ **** ] (g) insider means any person who is: i) a connected person; or ii) in possession of or having access to unpublished price sensitive information; 20 [NOTE : Since generally available information is defined, it is intended that anyone in possession of or having access to unpublished price sensitive information should be considered as an insider regardless of the manner in which one came into possession of or had access to such information. Various circumstances are provided to enable such a person to demonstrate that he has not indulged in insider trading. Therefore, this definition is intended to bring within its reach any person who is in receipt of or has access to unpublished price sensitive information. The onus of showing that a certain person was in possession of or had access to unpublished price sensitive information at the time of trading would, therefore, be on the person leveling the charge after which the person who has traded when in possession of or having access to unpublished price sensitive information may demonstrate that he was not in such possession or that he has not traded or he could not access or that his trading when in possession of such information was squarely covered by the exonerating circumstances. ] (h) promoter shall have the meaning assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2 [ 2018 ] or any modification thereof; 4A [ (ha) promoter group shall have the meaning assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations , 2018 or any modification thereof; ] 3 [ 4B [ (hb) ] proposed to be listed shall include securities of an unlisted company: (i) if such unlisted company has filed offer documents or other documents, as the case may be, with the Board, stock exchange(s) or registrar of companies in connection with the listing; or (ii) if such unlisted company is getting listed pursuant to any merger or amalgamation and has filed a copy of such scheme of merger or amalgamation under the Companies Act, 2013; ] 21 [ (hc) relative shall mean the following: (i) spouse of the person; (ii) parent of the person and parent of its spouse; (iii) sibling of the person and sibling of its spouse; (iv) child of the person and child of its spouse; (v) spouse of the person listed at sub-clause (iii); and (vi) spouse of the person listed at sub-clause (iv) NOTE : It is intended that the relatives of a connected person too become connected persons for the purpose of these regulations. It is a rebuttable presumption that a connected person had UPSI. ] (i) securities shall have the meaning assigned to it under the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or any modification thereof 5 [ **** ] ; (j) specified means specified by the Board in writing; (k) takeover regulations means the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and any amendments thereto; (l) trading means and includes subscribing, 6 [ redeeming, switching, ] buying, selling, dealing, or agreeing to subscribe, 7 [ redeem, switch, ] buy, sell, deal in any securities, and trade shall be construed accordingly ; NOTE: Under the parliamentary mandate, since the Section 12A (e) and Section 15G of the Act employs the term dealing in securities , it is intended to widely define the term trading to include dealing. Such a construction is intended to curb the activities based on unpublished price sensitive information which are strictly not buying, selling or subscribing, such as pledging etc when in possession of unpublished price sensitive information. (m) trading day means a day on which the recognized stock exchanges are open for trading; (n) unpublished price sensitive information means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following: (i) financial results; (ii) dividends; (iii) change in capital structure; (iv) mergers, de-mergers, acquisitions, delistings, disposals and expansion of business 22 [ , award or termination of order/contracts not in the normal course of business ] and such other transactions; (v) changes in key managerial personnel 23 [ , other than due to superannuation or end of term, and resignation of a Statutory Auditor or Secretarial Auditor; ] 24 [ (vi) change in rating(s), other than ESG rating(s); (vii) fund raising proposed to be undertaken; (viii) agreements, by whatever name called, which may impact the management or control of the company; (ix) fraud or defaults by the company, its promoter, director, key managerial personnel, or subsidiary or arrest of key managerial personnel, promoter or director of the company, whether occurred within India or abroad; (x) resolution plan/ restructuring or one time settlement in relation to loans/borrowings from banks/financial institutions; (xi) admission of winding-up petition filed by any party /creditors and admission of application by the Tribunal filed by the corporate applicant or financial creditors for initiation of corporate insolvency resolution process against the company as a corporate debtor, approval of resolution plan or rejection thereof under the Insolvency and Bankruptcy Code, 2016; (xii) initiation of forensic audit, by whatever name called, by the company or any other entity for detecting mis-statement in financials, misappropriation/ siphoning or diversion of funds and receipt of final forensic audit report; (xiii) action(s) initiated or orders passed within India or abroad, by any regulatory, statutory, enforcement authority or judicial body against the company or its directors, key managerial personnel, promoter or subsidiary, in relation to the company; (xiv) outcome of any litigation(s) or dispute(s) which may have an impact on the company; (xv) giving of guarantees or indemnity or becoming a surety, by whatever named called, for any third party, by the company not in the normal course of business; (xvi) granting, withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals. Explanation 1- For the purpose of sub-clause (ix): a. Fraud shall have the same meaning as referred to in Regulation 2(1)(c) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. b. Default shall have the same meaning as referred to in Clause 6 of paragraph A of Part A of Schedule III of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Explanation 2- For identification of events enumerated in this clause as unpublished price sensitive information, the guidelines for materiality referred at paragraph A of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as may be specified by the Board from time to time and materiality as referred at paragraph B of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 shall be applicable. ] 4 [****] NOTE: It is intended that information relating to a company or securities, that is not generally available would be unpublished price sensitive information if it is likely to materially affect the price upon coming into the public domain. The types of matters that would ordinarily give rise to unpublished price sensitive information have been listed above to give illustrative guidance of unpublished price sensitive information. (2) Words and expressions used and not defined in these regulations but defined in the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996) or the Companies Act, 2013 (18 of 2013) and rules and regulations made thereunder shall have the meanings respectively assigned to them in those legislation. ************* NOTES:- 1 . Inserted vide SEBI/LAD-NRO/GN/2018/59 Dated 31-12-2018 w.e.f. 01-04-2019 2 . Substituted vide SEBI/LAD-NRO/GN/2018/59 Dated 31-12-2018 w.e.f. 01-04-2019 before it was read as 2009 3 . Inserted vide SEBI/LAD-NRO/GN/2018/59 Dated 31-12-2018 w.e.f. 01-04-2019 4 . Omitted vide SEBI/LAD-NRO/GN/2018/59 Dated 31-12-2018 w.e.f. 01-04-2019 before it was read as, (vi) material events in accordance with the listing agreement. 4A . Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2019 /02 dated 21-01-2019 4B . Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/ 2019 /02 dated 21-01-2019 before it was read as, (ha) 5 . Omitted vide Notification No. SEBI/LAD-NRO/GN/2022/108 dated 24-11-2022 w.e.f. 01-11-2024 before it was read as, except units of a mutual fund 6 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/108 dated 24-11-2022 w.e.f. 01-11-2024 7 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/108 dated 24-11-2022 w.e.f. 01-11-2024 8 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/181 dated 17-05-2024 9 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/181 dated 17-05-2024 10 . Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/181 dated 17-05-2024 before it was read as, is 11 . Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, (i) any person who is or has during the six months prior to the concerned act been associated with a company, directly or indirectly, in any capacity including by reason of frequent communication with its officers or by being in any contractual, fiduciary or employment relationship or by being a director, officer or an employee of the company or holds any position including a professional or business relationship between himself and the company whether temporary or permanent, that allows such person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access. 12 . Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, an immediate 13 . Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, immediate 14 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 15 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 16 . Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, Immediate relatives 17 . Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, not 18 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 19 . Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, NOTE: It is intended that the immediate relatives of a connected person too become connected persons for purposes of these regulations. Indeed, this is a rebuttable presumption. 20 . Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 before it was read as, NOTE: Since generally available information is defined, it is intended that anyone in possession of or having access to unpublished price sensitive information should be considered an insider regardless of how one came in possession of or had access to such information. Various circumstances are provided for such a person to demonstrate that he has not indulged in insider trading. Therefore, this definition is intended to bring within its reach any person who is in receipt of or has access to unpublished price sensitive information. The onus of showing that a certain person was in possession of or had access to unpublished price sensitive information at the time of trading would, therefore, be on the person leveling the charge after which the person who has traded when in possession of or having access to unpublished price sensitive information may demonstrate that he was not in such possession or that he has not traded or or he could not access or that his trading when in possession of such information was squarely covered by the exonerating circumstances. 21 . Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/215 dated 04-12-2024 22 . Inserted vide F. No. SEBI/LAD-NRO/GN/2025/235 dated 11-03-2025 23 . Substituted vide F. No. SEBI/LAD-NRO/GN/2025/235 dated 11-03-2025 before it was read as, ; and 24 . Inserted vide F. No. SEBI/LAD-NRO/GN/2025/235 dated 11-03-2025