NOVUS Velox UPSI/SDD

To ensure compliance with the requirements given in the SEBI (Prohibition of Insider Trading) Regulations, 2015, and to prevent insider trading, the listed company has to put in place an effective system of internal controls viz.

• 1. All employees who have access to UPSI are identified as designated employees.
• 2. All UPSI shall be identified and its confidentiality shall be maintained as per the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015
• 3. A list of all employees and other persons with whom UPSI is shared shall be maintained and confidentiality agreements shall be signed or notice shall be served to all such employees and persons.
• 4. Adequate restrictions shall be placed on the communication or procurement of UPSI, as required by the SEBI (Prohibition of Insider Trading) Regulations, 2015.

No insider shall trade in securities that are listed or proposed to be listed on a stock exchange when in possession of unpublished price sensitive information. That is trading in securities while in possession of UPSI is prohibited as per the regulations. These regulations come under the purview of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

Trading as defined under Regulation 2 (1) (l) means and includes subscribing, buying, selling, dealing, or agreeing to subscribe, buy, sell, deal in any securities, and "trade" shall be construed accordingly.
The term trading is widely defined to include dealing in securities and intended to curb the activities based on unpublished price sensitive information (UPSI) which are strictly not buying, selling or subscribing, such as pledging etc. Hence, trading would include creation/invocation/revocation of pledge.

Regulation 2(1) (g) of SEBI (PIT) Regulations, 2015 defines ‘insider’ as any person who is:

• · a connected person; or
• · in possession of or having access to unpublished price sensitive information.

Therefore, even if a person is not classified as a designated person, having access to UPSI would make such a person an ‘insider’.
As per Regulation 4 (1) of SEBI (PIT) Regulations, 2015, an insider is prohibited to trade while in possession of UPSI.

Unpublished price sensitive information means any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following:

• 1. financial results;
• 2. dividends;
• 3. change in capital structure;
• 4. mergers, de-mergers, acquisitions, delisting, disposals, and expansion of business and such other transactions;
• 5. changes in key managerial personnel

The following events / information are also considered as UPSI from June 9, 2025:

• · Award or termination of order/contracts not in the normal course of business
• · changes in key managerial personnel ., other than due to superannuation or end of term, and resignation of a Statutory Auditor or Secretarial Auditor
• · change in rating(s), other than ESG rating(s).
• · fund raising proposed to be undertaken.
• · agreements, by whatever name called, which may impact the management or control of the company.
• · fraud or defaults by the company, its promoter, director, key managerial personnel, or subsidiary or arrest of key managerial personnel, promoter or director of the company, whether occurred within India or abroad.
• · resolution plan/ restructuring or one time settlement in relation to loans/borrowings from banks/financial institutions.
• · admission of winding-up petition filed by any party /creditors and admission of application by the Tribunal filed by the corporate applicant or financial creditors for initiation of corporate insolvency resolution process against the company as a corporate debtor, approval of resolution plan or rejection thereof under the Insolvency and Bankruptcy Code, 2016.
• · initiation of forensic audit, by whatever name called, by the company or any other entity for detecting misstatement in financials, misappropriation/ siphoning or diversion of funds and receipt of final forensic audit report.
• · action(s) initiated or orders passed within India or abroad, by any regulatory, statutory, enforcement authority or judicial body against the company or its directors, key managerial personnel, promoter or subsidiary, in relation to the company.
• · outcome of any litigation(s) or dispute(s) which may have an impact on the company.
• · giving of guarantees or indemnity or becoming surety, by whatever named called, for any third party, by the company not in the normal course of business.
• · granting withdrawal, surrender, cancellation or suspension of key licenses or regulatory approvals.

The requirement to maintain structured digital database under Regulation 3(5), containing the names of such persons or entities with whom UPSI is shared, is applicable to listed companies, and intermediaries and fiduciaries who handle UPSI of a listed company in the course of business operations.
The Structured Digital Database shall be maintained with adequate internal control and checks such as time stamping and audit trails to ensure non-tampering of the database.
The listed company should maintain structured digital database internally, which shall contain information including the following:

• 1. Details of the Unpublished Price Sensitive Information (UPSI)
• 2. Capture the nature of UPSI shared
• 3. Details of persons with whom such UPSI is shared (along with their PANs/other unique identifier) and details of persons who have shared the information.

Companies are required to maintain this structured digital database even when the information is shared only within the company.

Regulation 3(5) requires structured digital database shall not be outsourced and shall be maintained internally with adequate internal controls and checks. Whether a listed company can use software provided by third party vendors, wherein the server is of the vendor but requisite entries are made by the employees of the company only?
The third party vendors are providing the services/software on login basis, where the server is maintained by the vendor. Therefore, the vendor may have access to such records which would be contrary to the regulations with respect to maintenance of structured digital database.
Nominee directors sharing information to their bank or financial institution for legitimate purpose, will be covered as communication of UPSI.

Following categories shall be deemed to be connected persons:

• (a). an immediate relative of connected persons specified in clause (i); or
• (b). a holding company or associate company or subsidiary company; or
• (c). an intermediary as specified in section 12 of the Act or an employee or director thereof
• (d). an investment company, trustee company, asset management company or an employee or director thereof; or
• (e). an official of a stock exchange or of clearing house or corporation; or
• (f). a member of board of trustees of a mutual fund or a member of the board of directors of the asset management company of a mutual fund or is an employee thereof; or
• (g). a member of the board of directors or an employee, of a public financial institution as defined in section 2 (72) of the Companies Act, 2013; or
• (h). an official or an employee of a self - regulatory organization recognised or authorized by the Board; or
• (i). a banker of the company; or
• (j). a concern, firm, trust, Hindu undivided family, company or association of persons wherein a director of a company or his immediate relative or banker of the company, has more than ten per cent of the holding or interest.

A trading window is the period during which designated persons and their immediate relatives are permitted to trade in the securities of the company. Under the SEBI (Prohibition of Insider Trading) Regulations, 2015, the compliance officer must close the trading window when designated persons are reasonably expected to have access to UPSI, such as ahead of financial results, dividend declarations, or other price sensitive announcements.
The trading window remains closed until 48 hours after the UPSI becomes generally available, and no designated person may trade in the company's securities during this period. NOVUS Velox automates trading window closure notices, tracks the closure and re-opening dates, and blocks pre-clearance requests raised during a closed window.

SEBI periodically amends the PIT Regulations, most recently expanding the list of events treated as UPSI effective June 9, 2025 (see "What is UPSI" above). A compliance checklist for staying current with SEBI PIT amendments typically includes:

• 1. Updating the Structured Digital Database (SDD) to capture newly notified UPSI events.
• 2. Refreshing the Code of Conduct and Code of Fair Disclosure to reflect the amended definitions.
• 3. Re-training designated persons on the revised disclosure and pre-clearance requirements.
• 4. Auditing trading window closure triggers against the updated list of UPSI events.
• 5. Confirming that PAN-linked trade reconciliation covers the amended scope of connected persons.

NOVUS Velox is updated in line with each SEBI PIT amendment so designated persons, the SDD, and trading window rules stay compliant without manual re-configuration.