Definition of ‘insider’ widened: Key facts

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Published: November 20, 2014 8:18:11 AM

Definition of insider had been made wider by including persons connected on the basis of being in any contractual, fiduciary or employment relationship.

The class of deemed insiders, on whom the onus lies to prove it is not guilty of insider trading has been widened by Sebi. (Thinkstock)The class of deemed insiders, on whom the onus lies to prove it is not guilty of insider trading has been widened by Sebi. (Thinkstock)

The board of the Securities and Exchange Board of India (Sebi) on Wednesday announced a host of market reforms, including new regulations to tackle the menace of insider trading and amending of the delisting guidelines. The regulator also approved new norms that will allow entities to settle enforcement proceedings for minor violations, even before the issuance of formal show cause notice by the market regulator.

Here are some key facts:

IMMEDIATE RELATIVE OF INSIDER TO COME UNDER LENS

* Immediate relatives of company insiders will be presumed to be connected persons, with a right to rebut the presumption.

* Definition of insider made wider by including persons connected on the basis of being in any contractual, fiduciary or employment relationship

* Insider will also include a person in possession to unpublished information

DELISTING NORMS AMENDED

* Delisting will be allowed only when the acquirer gets 90% of the stake
* Timeline cut from 137 calendar days to 76  working days

NO ACTION AGAINST WILFUL DEFAULTERS

* The board of the Sebi just approves plan to review the policy on restricting wilful defaulters from fund raising from the market after public consultation

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