PRESENTATION. SEBI REGULATIONS Insider Trading, SAST, etc. CHAMBER OF TAX CONSULTANTS MUMBAI 30th April,.2016

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1 PRESENTATION on SEBI REGULATIONS Insider Trading, SAST, etc. CHAMBER OF TAX CONSULTANTS MUMBAI 30th April,.2016 Presented By DR. S. D. ISRANI Senior Partner SD ISRANI LAW CHAMBERS 03/05/16 (c) SD ISRANI LAW CHAMBERS 1

2 Law should be like clothes. They should be made to fit the people they are meant to serve. CLARENCE DARROW 03/05/16 (c) SD ISRANI LAW CHAMBERS 2

3 SEBI (Prohibition of Insider Trading) Regulations, (Insider Trading) 03/05/16 (c) SD ISRANI LAW CHAMBERS 3

4 (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 03/05/16 (c) SD ISRANI LAW CHAMBERS 4

5 ..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compliance of policies, procedures, maintenance of records, monitoring adherence to the rules for the preservation of unpublished price sensitive information, monitoring of trades and the implementation of the codes specified in these regulations under the overall supervision of the board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; 03/05/16 (c) SD ISRANI LAW CHAMBERS 5

6 (d) "connected person" means,- (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 03/05/16 (c) SD ISRANI LAW CHAMBERS 6

7 ..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himself and the company whether temporary or permanent, that allows such person, directly or indirectly, access to unpublished price sensitive information or is reasonably expected to allow such access. 03/05/16 (c) SD ISRANI LAW CHAMBERS 7

8 (d)(ii)deemed Connected Persons (a)to (j) (a)an immediate relative of connected persons (b) a holding / associate or subsidiary company; (c) an intermediary or an employee or director (d) an investment / trustee/ asset management company or an employee or director thereof; (e) an official of a stock exchange or of clearing house or corporation; or 03/05/16 (c) SD ISRANI LAW CHAMBERS 8

9 (f) a member of board of trustees of a MF / member of the BOD of AMC of a mutual fund or is an employee thereof; (g) a member of the BOD or an employee, of a public financial institution; (h) an official /employee of a recognised or authorized SRO. (i)a banker of the company; or. 03/05/16 (c) SD ISRANI LAW CHAMBERS 9

10 (j) a concern, firm, trust, Hindu undivided family, company or association of persons wherein a director of a company or his immediate relative or banker of the company, has more than ten per cent. of the holding or interest; 03/05/16 (c) SD ISRANI LAW CHAMBERS 10

11 Reg. 2(1) (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. 03/05/16 (c) SD ISRANI LAW CHAMBERS 11

12 (g) "insider" means any person who is: i) a connected person; or ii) in possession of or having access to unpublished price sensitive information; 03/05/16 (c) SD ISRANI LAW CHAMBERS 12

13 (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: 03/05/16 (c) SD ISRANI LAW CHAMBERS 13

14 (i) financial results; (ii) dividends; (iii) change in capital structure; (iv) mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions; (v) changes in key managerial personnel;& (vi) material events in accordance with the listing agreement 03/05/16 (c) SD ISRANI LAW CHAMBERS 14

15 Restrictions on communication and trading by insiders Communication or procurement of unpublished price sensitive information. Trading when in possession of unpublished price sensitive information 03/05/16 (c) SD ISRANI LAW CHAMBERS 15

16 TRADING PLAN 03/05/16 (c) SD ISRANI LAW CHAMBERS 16

17 Initial Disclosure Every person on appointment as a KMP or a director of the company or upon becoming a promoter shall disclose his holding of securities of the company as on the date of appointment or becoming a promoter, to the company within seven days of such appointment or becoming a promoter. 03/05/16 (c) SD ISRANI LAW CHAMBERS 17

18 Continual Disclosure Promoter, employee and director shall disclose to the company the number of such securities acquired / disposed of within 2 trading days of such transaction if the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of ten lakh rupees. 03/05/16 (c) SD ISRANI LAW CHAMBERS 18

19 Continual Disclosure Company to notify the particulars of such trading to SE within 2 trading days of receipt of the disclosure or from becoming aware of such information.. 03/05/16 (c) SD ISRANI LAW CHAMBERS 19

20 Disclosures by other connected persons.. 03/05/16 (c) SD ISRANI LAW CHAMBERS 20

21 CODES OF FAIR DISCLOSURE AND CONDUCT 03/05/16 (c) SD ISRANI LAW CHAMBERS 21

22 COMPLIANCES & DISCLOSURES Under SAST REGULATIONS, /05/16 (c) SD ISRANI LAW CHAMBERS 22

23 GENERAL EXEMPTIONS Reg /05/16 (c) SD ISRANI LAW CHAMBERS 23

24 EXEMPTIONS BY THE BOARD Reg /05/16 (c) SD ISRANI LAW CHAMBERS 24

25 Disclosure-related provisions Reg. 28 to 31 Shares / voting rights in a target company- existing & new with PACs, aggregating to five per cent or more Changes in excess of two percent Reporting within 2 working days 03/05/16 (c) SD ISRANI LAW CHAMBERS 25

26 Continual disclosures Every person with PACs holds shares / voting rights 25% or more of the voting rights in a target company, to disclose as of the 31st day of March The promoter with PACs to disclose aggregate shareholding / voting rights as of the 31st day of March ever year Disclosures to be made within seven working days to, (a) every SE; and (b) the target company at its registered office 03/05/16 (c) SD ISRANI LAW CHAMBERS 26

27 Disclosure of encumbered shares. The promoter & PACs to disclose details of shares encumbered / invocation / release of such encumbrance of shares Disclosure to be made within 7 working days to SE & Company 03/05/16 (c) SD ISRANI LAW CHAMBERS 27

28 Compliances & Disclosures Delisting Offer Voluntary Offer Acquisition of Control 03/05/16 (c) SD ISRANI LAW CHAMBERS 28

29 SEBI (Foreign Portfolio Investors) Regulations, 2014 (FPI) FII deemed to be FPI Registration as FPI Eligibility criteria of FPI Categories of FPI - I, II & III 03/05/16 (c) SD ISRANI LAW CHAMBERS 29

30 (FPI) Grant of certificate Procedure where certificate is not granted Suspension, cancellation or surrender of certificate Designated Depository Participant (DDP) 03/05/16 (c) SD ISRANI LAW CHAMBERS 30

31 FPI & DDP General Obligations & Responsibilities Appointment of Compliance Officer Code of Conduct (FPI) 03/05/16 (c) SD ISRANI LAW CHAMBERS 31

32 SEBI (Portfolio Managers) Regulations, 1993 Registration Grant of Certificate Consideration of application Reports Appointment of Compliance Officer 03/05/16 (c) SD ISRANI LAW CHAMBERS 32

33 THANK YOU DR. S.D. ISRANI Senior Partner S.D. ISRANI LAW CHAMBERS ADVOCATES & SOLICITORS(UK) Chambers: 911, Tulsiani Chambers, Nariman Point, Mumbai Tel: sdi@isranilaw.com 03/05/16 (c) SD ISRANI LAW CHAMBERS 33