value of the trade or the number of securities to be traded. “Insiders were often scared of trading and this exemption provides them with the window to go for a planned trade,” said Sandeep Parekh, of FinSec Law Advisors.
The committee though fell short of providing absolute immunity to the trading plan from investigation and said, “(it) would not provide absolute immunity from investigation into whether such manipulation of timing had been used to circumvent the prohibition on violative insider trading,” said the report.
Experts say that even shares earned under the employee stock ownership plan (ESOP) will have to be a part of the trading plan. “Sale of shares earned by insiders under the ESOP schemes should also be a part of the trading plan,” said Parekh.
The committee has proposed to prohibit insiders from communicating or allowing access to UPSI unless required for discharge of duties or for compliance with law. While it has proposed to clarify on what constitutes UPSI, it has also provided a list of types of information that may be regarded as price sensitive.