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TMI BlogMaster Circular on Surveillance of Securities MarketX X X X Extracts X X X X X X X X Extracts X X X X ..... e circulars, the content of the relevant circular shall prevail. 5. This Master Circular is available on the SEBI website at https://www.sebi.gov.in/ under the category Legal Master Circulars . Yours faithfully, Kranti Sardesai Deputy General Manager Phone: +91-22-26449115 E-mail: [email protected] Table of Contents 1. Trading Rules and Shareholding in dematerialized mode .......................................... 4 2. Unauthenticated news circulated by SEBI Registered Market Intermediaries through various modes of communication .............................................................................. 6 3. SEBI (Prohibition of Insider Trading) Regulations, 2015 ........................................... 8 3.1 Disclosures under Regulation 6 and Regulation 8 (Code of Fair Disclosure) and Regulation 9 (Code of Conduct) .................................................................................................. 8 3.2 Allowing Offer for Sale (OFS) and Rights Entitlements (RE) transactions during trading window closure period ..................................................................................................... 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded 2 . 1.1.2. In order to further promote dematerialization of securities, encourage orderly development of the securities market and to improve transparency in the dealings of shares by promoters including pledge / usage as collateral, SEBI in consultation with Stock Exchanges, has decided that the securities of companies shall be traded in the normal segment of the exchange if and only if, the company has achieved 100% of promoter s and promoter group s shareholding in dematerialized form latest by the quarter ended December 2011 3 as reported to the stock exchanges 4 . 1.1.3. In light of representations received from various companies and in consultation with Stock Exchanges, it has been decided that following exemptions shall be taken into consideration while arriving at compliance with 100% promoter(s) holding in demat form. Such exemption shall be applicable in cases where 5 :- 1.1.3.1. Promoter(s) have sold their shares in physical mode and such shares have not been lodged for transfer with the company; or 1.1.3.2. Matters concerning part/entire shareholding of promoters/promoter group are sub judice before any Court/Tribunal; or 1.1.3.3. Shares cannot be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blogs/chat forums/e-mail etc. by employees of Broking Houses/Other Intermediaries without adequate caution as mandated in the Code of Conduct for Stock Brokers and respective Regulations of various intermediaries registered with SEBI. 2.2. It was also observed that the Intermediaries do not have proper internal controls and do not ensure that proper checks and balances are in place to govern the conduct of their employees. Due to lack of proper internal controls and poor training, employees of such intermediaries are sometimes not aware of the damage which can be caused by circulation of unauthenticated news or rumours. It is a well-established fact that market rumours can do considerable damage to the normal functioning and behaviour of the market and distort the price discovery mechanisms. 2.3. In view of the above facts, SEBI Registered Market Intermediaries are directed that: 2.3.1. Proper internal code of conduct and controls should be put in place. 2.3.2. Employees/temporary staff/voluntary workers etc. employed/working in the Offices of market intermediaries do not encourage or circulate rumours or unverified information obtained from client, industry, any trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended. 3.2.2. Clause 4 (3) (b) of Schedule B read with Regulation 9 of PIT Regulations, inter-alia, states that trading window restrictions shall not apply in respect of transactions mentioned therein or transactions undertaken through such other mechanism as may be specified by the Board from time to time. 3.2.3. In addition to the transactions mentioned in Clause 4 (3) (b) of Schedule B read with Regulation 9 of PIT Regulations, trading window restrictions shall now not apply in respect of OFS and RE transactions carried out in accordance with the framework specified by the Board from time to time. 3.3. Reporting to Stock Exchanges regarding violations under Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 relating to the Code of Conduct (CoC) 12 3.3.1. In terms of clause 13 of Schedule B (in case of listed companies) and clause 11 of Schedule C (in case of intermediaries and fiduciaries) read with Regulation 9 of the amended PIT Regulations, the listed companies, intermediaries and fiduciaries shall promptly inform the Stock Exchange(s) where the concerned securities are traded, regarding violations relating to CoC unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. To begin with, the system driven disclosures shall pertain to trading in equity shares and equity derivative instruments i.e. Futures and Options of the listed company (wherever applicable) by the entities. 3.4.4. The procedure for implementation of the system driven disclosures is provided at Annexure 3. 3.4.5. The Depositories and Stock Exchanges shall make necessary arrangements such that the disclosures pertaining to PIT Regulations are disseminated on the websites of respective stock exchanges with effect from October 01, 2020. 3.4.6. The system would continue to run parallel with the existing system i.e. entities shall continue to independently comply with the disclosure obligations under PIT Regulations as applicable to them till March 31, 2021. 3.4.7. As currently done, the disclosures generated through the system shall be displayed separately from the regular disclosures filed with the exchanges. 3.4.8. This circular supersedes the earlier circulars dated December 01, 2015, December 21, 2016 and May 28, 2018 with respect to implementation of System driven disclosures under PIT Regulations. Annexures Annexure 1 - Formats for Disclosures under SEB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ISIN of the company: _______________________ Details of Securities held on appointment of Key Managerial Personnel (KMP) or Director or upon becoming a Promoter or member of the promoter group of a listed company and immediate relatives of such persons and by other such persons as mentioned in Regulation 6(2). Name, PAN, CIN/DIN Address with contact nos. Category of Person (KMP / Director or Promoter or member of the promoter group/ Immediate relative to/others, etc.) Date of appointment of KMP/Director / OR Date of becoming Promoter/ member of the promoter group Securities held at the time of appointment of KMP/Director or upon becoming Promoter or member of the promoter group % of Shareholding Type of securities (For eg. Shares, Warrants, Convertible Debentures, Rights entitlements, etc.) No. 1 2 3 4 5 6 Note: Securities shall have the meaning as defined under regulation 2(1)(i) of SEBI (Prohibition of Insider Trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange on which the trade was executed Type of securities (For eg. Shares, Warrants, Convertible Debentures, Rights entitlements etc.) No. and % of share holding Type of securities (For eg. Shares, Warrants, Convertible Debentures, Rights entitlement, etc.) No. Value Transaction Type (Purchase/ sale Pledge / Revocation / Invocation/ Others-please specify) Type of securities (For eg. Shares, Warrants, Convertible Debentures, Rights entitlement, etc.) No. and % of shareholding From To 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Note: (i) Securities shall have the meaning as defined under regulation 2(1)(i) of SEBI (Prohibition of Insider Trading) Regulations, 2015. (ii) Value of transaction excludes taxes/brokerage/any other charges Det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction Type (Purchase/ Sale/ Pledge/ Revocation / Invocation/ Others-please specify) Type of securities (For eg. Shares, Warrants, Convertible Debentures, Rights entitlement, etc.) No. and % of share holding From To 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Note: (i) Securities shall have the meaning as defined under regulation 2(1)(i) of SEBI (Prohibition of Insider Trading) Regulations, 2015. (ii) Value of transaction excludes taxes/brokerage/any other charges Details of trading in derivatives on the securities of the company by other connected persons as identified by the company Trading in derivatives (Specify type of contract, Futures or Options etc.) Exchange on which the trade was executed Type of Contract Contract specifications Buy Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation of trade(s) by concerned DP/director/promoter/promoter group to Company under Regulation 7 of SEBI (PIT) Regulations, 2015 ii. Date of intimation of trade(s) by Company to stock exchanges under regulation 7 of SEBI (PIT) Regulations, 2015 4 Details of violations observed under Code of Conduct 5 Action taken by Listed company/ Intermediary/ Fiduciary 6 Reasons recorded in writing for taking action stated above 7 Details of the previous instances of violations, if any, since last financial year 8 If any amount collected for Code of Conduct violation(s) i. Mode of transfer to SEBI - IPEF (Online/Demand Draft) ii. Details of transfer/payment In case of Online: Particulars Details Name o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lder/Demat account number(s), the depositories shall tag such Demat accounts in their depository systems at ISIN level. 6. The designated depository shall also share with the stock exchanges, company-wise details of entities. In case of PAN exempt entity, respective depository shall share the Demat account number(s) details with the stock exchanges. Any update (additions or deletions) in this information by listed company shall be updated by the designated depositories with the stock exchanges on a daily basis. The information shall be shared via system interface established between the depositories and stock exchanges. 7. The depositories shall provide the following data pertaining to the tagged Demat account(s) separately to the stock exchanges on daily basis: Details of transactions for pledge/revocation/invocation of shares and other encumbrances such as NDU etc. of the entities. Details of off market transactions of the entities. Details of transmission of shares of the entities. Details of corporate actions such as ESOPs, Bonus, Rights, etc. of the entities Additionally, details of market transfers in case of PAN Exempt entities. 8. Based on the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Disclosures under SEBI (PIT) Regulations, 2015 9 16-Sep-15 Cir/ISD/2/2015 Revised Disclosures formats under SEBI (PIT) Regulations, 2015 10 23-Jul-20 SEBI/HO/ISD/CIR/P/P/2020/133 Allowing Offer for Sale (OFS) and Rights Entitlements (RE) transactions during trading window closure period 11 23-Jul-20 SEBI/HO/ISD/CIR/P/P/2020/135 Reporting to Stock Exchanges regarding violations of SEBI (PIT) Regulations, 2015 relating to Code of Conduct 12 09-Sep-20 SEBI/HO/ISD/CIR/P/P/2020/168 Automation of Continual Disclosures under Regulation 7(2) of SEBI (Prohibition of Insider Trading) Regulations, 2015 - System driven disclosures 13 09-Feb-21 SEBI/HO/ISD/CIR/P/P/2021/19 Revised disclosure formats under Regulation 7 of SEBI (Prohibition of Insider Trading) Regulations, 2015 FOOTNOTE:- 1 Circular SEBI/Cir/ISD/ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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