New insider trading, listing norms likely by month-end

  • HT Correspondent, Hindustan Times, Mumbai
  • Updated: Nov 03, 2014 23:29 IST

To protect interests of minority shareholders and make listed companies more accountable towards investors, the Securities and Exchange Board of India (Sebi) is likely to announce new insider trading norms by month-end, sources said on Monday. The market regulator is also likely to come out with restructured listing norms including those on related party transactions based on the suggestions of an expert panel.

With the current norms being more than two-decades old, Sebi is looking to widen the scope of insider trading guidelines to adapt to new changes in companies law, people familiar with the matter said.

Sebi had formed a panel under former chief justice of Karnataka and Kerala high courts, K Sodhi, to suggest changes and include feedback from industry associations and other stakeholders on the issue.

The changes suggested by the panel could include tighter provisions under Regulation 12, which makes it mandatory for all listed companies and organisations to frame and adopt a code of internal procedures.

The expert panel has also sought to widen the ambit of clauses on disclosures by promoters, specially when there is any change in shareholding patterns or voting rights.

Sebi will also consider the changes suggested by the regulator’s international advisory board, which seeks to bring the insider trading norms on par with global best practices.

Goldman Sachs director Rajat Gupta was arrested in the US on charges of insider trading.

Sebi will also come out with new rules on listing norms due to difficulty in tracking transactions of related parties, especially in business combinations and acquisitions of interests.

“There is an urgency to revamp listing regulations as Indian companies are moving towards adopting global accounting norms,” said one of the persons involved in analysing the feedback from industry associations.

Finance minister Arun Jaitley, in his Budget speech, had said that Indian accounting standards will have to converge with International Financial Reporting Standards by 2016-17.

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