SEBI has put out a press release announcing the submission of Justice Sodhi Committee recommendations on insider trading in listed companies. The salient features of the proposed regulations based on his recommendations are also given. From a cursory glance at the recommendations, there is nothing new in that which is not already covered by the existing Insider Trading Regulations. The only point of interest or rather concern is in para 5 of the press release which states as follows:
5- Insiders who are liable to possess UPSI all round the year would have the option to formulate pre-scheduled trading plans. In such cases, the new UPSI that may come into their possession without having been with them when formulating the plan would not impede their ability to trade. Trading plans would, however, be required to be disclosed to the stock exchanges and have to be strictly adhered to.
It is not clear what this means – that insiders who are likely to possess UPSI all the time are required to formulate their buying and selling plans in advance. I don’t know which investor would have that kind of clairvoyance to formulate their trading plans in advance. Anyways the devil is in the details, so let us wait for the detailed regulations based on the recommendations.
A copy of the press release is given in this link.