Regulation 5B - Definitions - Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

1 [Definitions. 5B.(1) For the purpose of this Chapter, (a) associate shall have the same meaning assigned to it under the Securities and Exchange Board of India (Mutual funds) Regulations, 1996; (b) connected person shall mean: (i) any person who is or has during the two months prior to the concerned act been associated with the mutual fund, asset management company and trustees, 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 employee of the asset management company and trustee or holds any position including a professional or business relationship with the mutual fund or asset management company or the trustees, whether temporary or permanent, that allows such a person, direct or indirect access to unpublished price sensitive information or is reasonably expected to allow such access; (ii) Without prejudice to the generality of the foregoing, the persons falling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) an immediate relative of connected persons specified in clause (i); or (b) Sponsor, holding company or associate company or subsidiary company of the Sponsor or Asset management company and Trustees; or (c) Board of Directors and key management personnel of sponsor of the mutual fund;or (d) Directors or employees of registrar and share transfer agents, custodians or valuation agencies of the mutual fund who have access or are reasonably expected to have access to unpublished price sensitive information relating to a mutual fund scheme or its units in the course of business operations; or (e) an official or an employee of fund accountant providing services to a mutual fund who have access or are reasonably expected to have access to unpublished price sensitive information relating to a mutual fund scheme or its units in the course of business operations; or (f) an official or an employee of a self-regulatory organization recognised or authorized by the Board; or (g) an official of a stock exchange for dissemination of information; or (h) Directors or employees of auditor, legal advisor or consultants of the mutual fund or asset management company who have access or are reasonably expected to have access to unpublished price sensitive information relating to a mutual fund scheme or its units in the course of business operation; or (i) an intermediary as specified in section 12 of the Act or an employee or director thereof who have access or are reasonably expected to have access to unpublished price sensitive information relating to a mutual fund scheme or its units in the course of business operations; or (j) a banker of the mutual fund or asset management company; or (k) a concern, firm, trust, HUF, company or association of persons wherein a director of an asset management company and Trustees or his immediate relative or banker of the company, has more than ten per cent of the holding or interest; (c) generally available information means information that is made available to the unitholders or made accessible to the public on a non-discriminatory basis; NOTE: Generally available information is intended to be defined to crystallize and appreciate its meaning. Information published on the website of a stock exchange would ordinarily be considered generally available. Explanation : The asset management companies/trustees shall immediately disseminate all material information on the platform of the stock exchange or in any other manner as may be specified by the Board, whenever the same needs to be communicated to the unitholders or a public notice needs to be made; (d) insider means any person who is: i. a connected person; or ii.in possession of or having access to unpublished price sensitive information pertaining to a scheme; (e) systematic transactions in the units of mutual fund are those transactions which are automatically triggered for execution on a periodic basis as instructed by the investor including Systematic Investment Plans, Systematic Transfer Plans or Systematic Withdrawal Plans; (f) unpublished price sensitive information shall mean any information, pertaining to a scheme of a mutual fund which is not yet generally available and which upon becoming generally available, is likely to materially impact the net asset value or materially affect the interest of unit holders and shall include the instances where there is a likelihood of: i. a change in the accounting policy; ii. a material change in the valuation of any asset or class of assets; iii. restrictions on redemptions, winding up of scheme(s); iv. creation of segregated portfolio; v. the triggering of the swing pricing framework and the applicability of the swing factor; vi. material change in the liquidity position of the concerned mutual fund scheme(s); vii. default in the underlying securities which is material to the concerned mutual fund scheme(s). Note: All other definitions in Chapter-I shall mutatis mutandis be applicable to transactions in the units of mutual funds. ] ************** NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/108 dated 24-11-2022 w.e.f. 01-11-2024