The Securities and Exchange Board of India (SEBI) has proposed to bring down the time given to companies to disclose price sensitive information under the insider trading regulations from nine days to two days.
This is to ensure there is no delay in disseminating price sensitive information to the market and to other shareholders, a move that would enhance corporate acciountability and add to investor interest.
In a consultative paper released on Monday, the market regulator said: "The time gap between the date of transaction and the date of dissemination of information by the stock exchange may be reduced from nine days to two working days by making necessary amendments to the relevant provisions of Insider Trading Regulations."
As per the listing agreement of the stock exchanges and SEBI Insider Trading Regulations, 1992 companies are required to disseminate price sensitive information to the market through stock exchanges and media on a continuous and prompt manner.
The directors, officers of the company, deemed insiders have to disclose their purchase and sale of shares in the company on crossing certain threshold limit prescribed in the regulation to the company.
They are required to disclose change in voting rights, shareholding within four working days and the company in turn is required to disclose this to the Stock Exchanges, on which the company is listed, within five days.