Securities and Exchange Board of India has notified new set of regulations, to put in place a framework for prohibition of insider trading in securities. As per the new Regulations, ‘insider’ means a connected person or a person having access or possession of unpublished price sensitive information. It may be noted that according to the note below the definition of ‘insider’, anyone in possession of or having access to unpublished price sensitive information should be considered an ‘insider’ regardless of how one came in possession of or had access to such information.
Along definition of ‘Connected person’ is also provided in the new Regulations to cover any person directly or indirectly associated with the company on basis of contractual, fiduciary or employment relationship. Frequent communication with the officers of the company by any person can also make that person connected with the company. The new Regulations notified on 15-1-2015, and coming into force after 120 days, also contain ‘note’ after number of provisions, explaining the intent and objectives of the particular clause, etc.