Resource Library4 min read857 words
What this covers: Compliance calendar for listed company insiders and promoters under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), covering trading window closures, disclosure obligations, and pre-clearance requirements.
Statutory framework: SEBI (Prohibition of Insider Trading) Regulations, 2015 (as amended 2018, 2019, 2020); Schedule B (Minimum Standards for Code of Conduct); SEBI Circular on Structured Digital Database (SDD) 2020.
Annual Compliance Calendar
| **At all times** | Trading Window is closed for all “Designated Persons” (as defined in the company’s Code of Internal Procedures and Conduct, “Code”), this is the default position unless the Compliance Officer specifically opens the window | Reg. 4(1) PIT Regs; Schedule B, Clause 4 |
| **45 days before the end of each financial quarter** | Trading Window typically opens (if no UPSI exists); the exact opening date is to be determined by the company’s Compliance Officer based on absence of UPSI | Company’s Code |
| **When UPSI is created or comes into existence (e.g., contract signed, financial results determined, merger decision taken)** | Trading Window **must be closed** immediately if it was open; all Designated Persons must be informed that the window is closed and that they hold UPSI | Reg. 4; Schedule B Clause 4 |
| **At least 2 days before a Board meeting on price-sensitive matters** | Trading Window must be closed; the closure must be notified to all Designated Persons in advance | Clause 4, Schedule B |
| **Until 48 hours after publication of financial results** | Trading Window remains closed; only opens after 48 hours have passed from announcement of quarterly/annual results | Clause 4, Schedule B (commonly 48 hours) |
| **Upon becoming a Designated Person / Insider** | **Initial Disclosure**: Director, officer, or any person who initially becomes an insider must disclose within **2 trading days** of becoming an insider their holdings in the listed company (Regulation 7(1)(a)) | Reg. 7(1)(a) |
| **When crossing 5% threshold (shares or voting rights)** | **Threshold Disclosure**: Promoter or Designated Person whose holdings change by 5% or more (cumulative in a financial year) must disclose to the company within **2 trading days** | Reg. 7(2)(a) |
| **Within 2 trading days of any trade** | **Continuous Disclosure**: Every Designated Person and every person who holds or has access to UPSI and trades in securities must disclose the trade to the company within 2 trading days of the trade | Reg. 7(2)(b) |
| **Within 2 trading days of receipt of disclosure from insider** | **Company to Stock Exchange**: The listed company must disclose received trade information to the Stock Exchange (BSE/NSE) within 2 trading days of receiving the insider’s disclosure | Reg. 7(2)(c) |
| **April 30 each year** | **Annual Disclosure**: Every promoter, director, and key managerial personnel must make an annual disclosure of their holdings as of March 31 to the company | Reg. 7(3) |
| **Within 2 trading days of receipt** | **Company to forward annual disclosures to Stock Exchange** | Reg. 7(3) |
| **Continuous** | **Structured Digital Database (SDD)**: All persons (in and outside the company) who have received UPSI must be recorded in the company’s SDD with: name, PAN, nature of UPSI shared, date of sharing, details of the transaction if any | Reg. 3(5)(6); SEBI SDD Circular 2020 |
Pre-Clearance Requirements
Designated Persons must obtain pre-clearance from the Compliance Officer before trading in the company’s shares (during an open trading window) if the proposed trade exceeds the threshold value prescribed in the company’s Code (typically INR 10 lakh in value).
| 1 | Designated Person submits pre-clearance application to Compliance Officer (Form provided in Code) |
| 2 | Application must include: declaration that no UPSI is held; the number and value of securities to be traded |
| 3 | Compliance Officer approves or rejects within **24-48 hours** (per company Code) |
| 4 | Once approved, trade must be executed within **5 trading days** of approval; if trade not executed, fresh pre-clearance required |
| 5 | Post-trade: Designated Person discloses trade to company within 2 trading days |
UPSI means information relating to a listed company or its securities, directly or indirectly, which is not generally available, and which upon becoming available is likely to materially affect the price of the securities. The following matters generate UPSI when the Board decides on them:
| Financial results (quarterly and annual) | From the date of Board meeting where results are finalised |
| Dividends | From Board recommendation |
| Mergers, acquisitions, demergers, restructurings | From the Board’s decision to explore |
| Material changes in key management | From Board decision |
| Agreements with strategic partners | From signing / Board approval |
| Litigation settlements (material) | From Board decision |
| Fund-raising (rights issue, QIP, preferential allotment) | From Board decision |
| Regulatory decisions of material consequence | From receipt by the company |
| Form A | Initial disclosure of shareholding by insider | Company |
| Form B | Disclosure of changes in shareholding crossing threshold | Company, then to Stock Exchange |
| Form C | Annual disclosure of holdings | Company, then to Stock Exchange |
| Form D | Trading plan submitted by insider | Company Compliance Officer |
Penalties for Insider Trading
| Insider trading (actual trade on UPSI) | Up to INR 25 crore or 3 times the profit made, whichever is higher |
| Non-disclosure of holdings | Up to INR 25 crore |
| Failure to maintain SDD | Disgorgement + penalty |
This resource is for general information purposes only and does not constitute legal advice. For advice on your specific situation, seek appropriate professional counsel.
| **Corpus Lawyers | 148 Lawyers Chambers, Saket Court Complex, New Delhi 110016 | mail@corpuslawyers.in** |
Prashant Kumar Nair is an Advocate-on-Record at the Supreme Court of India. He practises across insolvency and restructuring, arbitration and dispute resolution, real estate and infrastructure, corporate and commercial law, taxation, intellectual property, regulatory and compliance, and capital markets law. He is a doctoral researcher at RGNUL focusing on the arbitration-insolvency interface. He is the founder of Corpus Lawyers.
linkedin.com/in/prashant-kumar-nairThis article is for informational purposes only and does not constitute legal advice. The views expressed are those of the author in a personal capacity. Readers should seek independent legal counsel before acting on any matter discussed herein. While every effort has been made to ensure accuracy, the author makes no representation as to the completeness or currency of the information at the time of reading.
