[NEW INSIDER TRADING NORMS. Sam Cuowbunsy and Sivasa Vp Ineoduction The menoce of insider wading wae recognised and cubed by the SEBL (Grchbion of lsder Tring) Regulason, 1992 which came int force eT ‘Nowambe, 3952 In order to bring cast in the ature offence, he eendinent 2008 was made by SEB flowed by the 2008 and 201? ameadnen, hee 206 and 2011 amendanens considerably reduced We importancs of inteasos a roving the offence it started the movement toward dato of presence ot ‘The proposed defo SEB Potion of sider Tracing) Regultons, 203, was brought Ino te publ domain by ‘te Commitee et op ster Ue staimarship of jsice NK Souhit The Camere kine Proposed dia, emphasised on the srct proton of ‘ws af Soca Information while if amed at maining itgety nthe aha Fe te scopy by investors and stabaholer the oft war ace open for eb ommend critques by SEB in Decembet, 1. Tis ws sso feo ene the elesivenas of te tepulatory measure adopted ae aut Se ct eed burden inpoed y it After eeving and tren te eae, SEB {hese new regaltons with amendment in ils Board Mestng tied oy the res RéaseNo.130/20147 ‘Through thse requis, the SBI has sought fo ring significant changes snd meanursseguting inser tading deting norma tng remcaees secures marke evar. They have widened th deition fo beater ‘connected person have changed the ans f proof fs person accel of ede trading in seus: have bought city in UPS andthe tke. Monsoves de distin reglations? have ben smplied ad tecaalies have boca codec ‘er ieviing public comme on hse May 201. TR nosck fo pore lf desrpticn a the ameniments approved by SEL nadion oe ran fr thar ise Howeres eset ee, "notes be to analyse the reason, fees and gue uf ie encase SESE poorer meus * Beeesier tetracaine, a 0) camel ipa inteSaop en SE ar ting Pe 1/5493) PnP EH), 4 Set Ciiegalay Sh prs Ba RS ap ea,% commer URNAL (an 2Comp ty searing change in burden of proof fh insider. Forte, he presumption of Blt of the ners evaluated inthe ight of he questi vate of he ‘sence. Lay depict the comparison wth repr to he deene of wading ‘ln ofthe US opin and he eine propel ‘Neo developments nd brie overview ofthe repustons Insider trading ees tobaying and sling of seers by corpora insire snvking tea i corso Uat of Riry day. slo tease of ined nope intormation by ier at we Aicary eyo he nterpie® Thus SEBI rence tof 'anpuiaed pce sent information’ {any manner injurious to nce ofthe eerie err 1 fates protect theatres ofthe invertors ard stakeholder, SEB has veces powers © tring in numerous new developsnts bythe approval of te proposed SEBL (Proton of ider Train) Regultions, 201A biel overview of he new ois wih wo ee cf pon ere sd Siotowe “Fait | — Ta ans — a aes | age Sonate Dione i Disa a deed a Peso ‘die "Connected 2. Gerla postion of pene has ‘ic empoyee, & protein or signiity Eiaieae ition ‘wend (Gemanen/tenpore bry Bp AND sacombiy ‘fasion in Spec have Pog} ous ee ie Shove pant aay tony withthe = (company shall bos es ‘sont prior toe om consred ade ao far been fade more ‘clase RES tees ang npn he 0 3p (Ween Ppp 4)= connotea, (2015)2Comp ty r oe Stenehip, Taser] The aetna | Te Stion | Tieng Indes as ovo Geiger” has | diference Segre: een simply | fist Tin ‘Tae eatogory ef «| hed under te | the simpy (some or doumed to | aes feet is | of ete fe comectedpewon [that of | provision ‘tho ha fo be proved | connected fn secondly Tein possesion of UPST| son and the | fal under as| Second of any | emovel of eto. pon “| fequrenen| Theoncndatgoryinof| panenion af | oF UIST hom Soe whoa in| UPL Be Bet Posesion of UPS Seger. pore Be Fppleaton i Se be: Inser sory prove that the Fier wae connect pon oe bee ion isan indarive | any Inortaon | addon of the Seeiive | defnlon “that "coves hat not | onept of GAT Tnioation | ay intrmaton whch | gnaily "| tat shows a (GPs) and| ratte dey or avalible which | ange in den Generty "| indeed ton company | upon beeing | f Prost rth Arvabie | nt which i publated | geeraliy [epee to "he Information |S ely to mately | valale, | iformaton (can) Moc he price of | aly fang ped = oe omlyie ‘ed thereon Presumption of guilt ofthe insider ‘The diference in presumption of gut may aswell be very slight to the Iuyman, but legally the shit in burden of proof ie skng between the wo regulations. Where inthe earlier provisos the presumption only rnd fo ‘achat ny iatder in poesion would be presumes to hae rd on bss ofthe posed UPS it hau ow been extend othe et hat any connected eset would te pram fo fave sce osc UPSL. Regulation (2) ends that Whoa rho Ba ra in ecarites @ conned pron Be ts fst he wes non Broach fe pron ‘rgulton (shall be on suck comced poson’ Th, where fet at ast Possession wa burn that a ob discharged bythe proscton/ acting uth sow » presumption, ebutable bythe one sccued of tng ‘pin oe i fie Tdin pion a0 Seay 1 pn tc ratte tag epson op eh hte canner Seon 8 Goa= conser a oumaL (2019 2Comp ty 1 some that diving is rom various cases, It became ‘burden and arduous fr SEDI to prove insider tang onthe bai of UPS, tal has this change wat efcted. For ian, he cae of U.K ¥ The ‘Adudting Ofer, SEDI? the fcr for asin nidr wading conicons ‘were ober, ar ipied from the Rejrenan Case, a: (1) eess 1 [Blomnation (2) slatonsip tere the per and the tppen (@) Sng of ‘ntact between the Spe and te pec () ining ofthe ede; ) pater of the trade; and (6) atempls to conceal eer te res of the rations ‘tween the Upperand the uppee® The prcsentonneded to charge a Duron hat met te Balance of posits for and apt the person charged Whe ting consstene withthe presumption of incence or honesty ofthe pers charge. The burden was leas than ‘bond reasonable doubt bat all kept ‘he conviction rte of ider wading below acepabe levels bona provided more opportunites to the acused fo break the prosecutions case, senply on ‘resumption of inecenc, TRS shackle has been removed now in the NeW repultns ‘The erie ele provided defence again conviction ofthe accused ae could prove tat he didnot radeon the base of umpablahed price se ‘Sionmaion but on some other buls™ Whether or not tis defence would be sade avaabe to the accused Is ot car fom the new regulations and would largely depend on the of the cour This i Bewuae oh he sddison of trading plane wads very ld tof dence emma ha ding bya conaced person lost sot Hable. Ieean be concud tat such aft as Boon brought to cur th menace of insider tading more effectively and more siciy” compared tthe exer regime. ‘Trading Plans Trading Pans, whch wore introduced by way of an amendment inthe US. secures Eachunge Act 1591, provide the mort plausible deence for compares Scsued of lider ting fr the US. scares market A "wading pla Is ‘Semnialy a plan comprising ofall posses regarding price movements, Iigity of sre, adn tracts of wading busines, amount of ep ein sean Sener ncionenateecmreterettes eects oom) Nownssman aAnRC NOMS = to be taded™ and the ike, Rule 1095%0f the SEC Rules provides an Cpportunty fo pully ade corporations st up ting plane and trade Gooding to pre-determined ratay stock eter. Thee pans ae used by Clrporaens tm defence to isder ending t prove Ut wading Was pre- ‘lad and not on UPSL On the question of einai cancellation of such line the fact that whaler the plane wes entered into in good flth and Sonal and not to avoid the radar ending norm under ale 145-(Q(7" ‘rcones important "The new Snsdor ting norms provide for the Incision ofthe concept of ‘wading plane’ ar prac’ in the USS" The Pret Release by SEB! cond Gach a provision f the exiting lation on insider tding with necsory SRfoguards ie exeeaton of he pan only port 6 month of patie done ier safgaaede incnde exieence of he plan fr 12 months and is Implementation after ir disionze™ These plans have o be sect flowed, must befor bona ide wanenctons and mast be dslosed on a stock exchange in Avance The S28 eglasone™ provide ht ners who are able possess ‘Urst may forma ting plans and emphasises on the monitoring nd approval ofsuch plansby a compliance office. "The Soh Comune Report expan that ringing nthe concep of tring, planes perling thins: opuepares prearranged tang plan n advance Entel iat Inter dae This ere at when te wade Ss exerted the {fader snow in possesion fnew UPS and the UPI wisch wasn pseeion ofthe inader when the plan was femlated has now been ade generally Sralable Thu ad plan was neither frmalated nor executed according © ‘Be new UPSL but only scoring to general avalabepublnvoration ‘The motivation for SEBI to inde he concep of "adn plan as been an analy of various assditons where fs srendy in use and evidence which lends fo the ane” While analysing the same the dindvaniges of foch a [provision and abuse of tring plas wa alo considered by SEBI and tha 2 umber of caves were added to the provision. The need for a corporate ‘@ielcommane apo) sconpl Bosra2 corner a ou (2M5)2Coep ‘complisnt mechanism for nid and bet ogulation of insider trading inte Tndlan secure mara lo necsated oe for sucha provision CConcason “The new ier trading norms wre propose by SEBI with view ocease roveetin in inserting can nina. Post Cxnpleon oft eat by the High Level Commitee the realtone were opened for publ comments and ‘rls The Prat Rlese of SEI data 19:1 2014 gave a green sgn! fore ‘gultons, giving a ret overiew ofthe provistns approved and fe changes trough te eng regime. The change in presnpen of gil of an ner ‘possesion of UPSI to tat ofa rebutable presumption of any connected person isa step in the ight direction teeae oft clarity ec in the prt arera Ale, te aditon of the concept of "ung pa atu deen [vale fo the isider paral othe US, martes masket Planes out the ‘nbancement ‘presumption of gu Allin al the SEB seems fo have opted 1 Salmeed approach but atthe sme tne has manage fo cave out tte ‘gl inthe fae of the dsl convincton of craed connected persons ee i’ en at on’ rt ft id “nr ng a ot tr a a a gt ihc ae aly cs Bgl del ce SR etl SiS Santa ci {ed ep nd nnd f won dls ca le tg gman fc sr cao ee ts Nhat art Tremont hf ef hein rnd a Fees TS aes etree Spores teas