SEBI proposes amendments to Insider Trading and Disclosure Regulations to expand scope of info disclosed by listed companies

In a consultation paper released on Sunday (Nov. 10), SEBI acknowledged existing ambiguities around what constitutes UPSI and seeks to clarify by specifying potential events that may fall under this category.

SEBI also intends to balance this initiative with its "ease of doing business" goal, avoiding significant increases in compliance burdens for listed companies.

A working group established to review the list of UPSI events recommended the addition of modifications in credit ratings, as well as fundraising activities by companies.

SEBI further proposed including any agreements that could result in changes in company management or control.

Events like fraud or defaults by a listed company or its key figures—including promoters, directors, or senior management—whether occurring in India or abroad, would qualify as UPSI, as would arrests of these individuals.

Additionally, any change in key managerial roles or resignation of a statutory or secretarial auditor should be classified as UPSI, though retirements or end-of-term completions should be excluded.

SEBI’s proposal also suggests listing corporate events related to resolution plans, restructuring, one-time loan settlements, and borrowing agreements with financial institutions as UPSI.

Other proposed UPSI events include court-admitted winding-up petitions filed by creditors, initiation of the corporate insolvency resolution process (CIRP) under the Insolvency Code, and any forensic audit involving financial misstatement or misappropriation, including final audit reports.

Furthermore, actions or orders by regulatory, enforcement, or judicial authorities against the listed company, its directors, or key personnel, as well as any award or termination of non-standard business contracts, should qualify as UPSI, the key regulator proposed.

Litigation outcomes impacting the listed entity would also be included in this list, as proposed by the SEBI.

SEBI has invited public feedback on these proposed changes, with a deadline of November 30.