SEBI PIT regulations are onerous and adherence to them is an ongoing activity. This checklist outlines the key requirements for listed companies to comply with SEBI's PIT regulations.

1. Code of Conduct and Internal Controls
  • Formulate and adopt a Code of Conduct: Establish a comprehensive code to regulate, monitor, and report trading by Designated Persons (DPs) and their immediate relatives.
  • Define Designated Persons (DPs): Clearly identify the employees and persons who, by virtue of their function or role, may have access to Unpublished Price Sensitive Information (UPSI).
  • Establish "Trading Window" restrictions: Define periods when trading is prohibited for DPs, typically before the declaration of financial results or other significant events.
  • Implement a pre-clearance mechanism: Require DPs to obtain approval from the Compliance Officer for trades that exceed a specified monetary threshold.
  • Enforce a "contra-trade" prohibition: Prohibit DPs from entering into opposite transactions (e.g., selling after buying) within a six-month period.
  • Formulate a "Chinese Wall" policy: Create an information barrier to segregate departments that have access to UPSI from those that do not.
  • Create a whistleblower policy: Establish a mechanism for employees to report suspected violations of the regulations.

2. Appointment and Role of the Compliance Officer
  • Appoint a senior-level Compliance Officer: Designate a financially literate individual to administer the code of conduct and report directly to the Board of Directors
  • Grant authority to the Compliance Officer: Empower the Compliance Officer to enforce the regulations, approve or reject pre-clearance requests, and maintain a "restricted list" of securities.

3. Structured Digital Database (SDD)
  • Maintain an internal Structured Digital Database: Create and maintain a non-outsourced, secure database to log every instance of UPSI being shared.
  • Record all key details: Ensure the SDD captures the names of the sender and recipient of UPSI, their PAN numbers, the nature of the information, and the date and time of the transaction.
  • Implement audit trails: The database must have adequate controls to ensure that it is non-tamperable and that all logs are preserved for at least eight years.

4. Disclosure Requirements
  • Initial disclosures: Ensure that promoters, directors, and key managerial personnel (KMPs) disclose their security holdings to the company within seven days of appointment or becoming a promoter.
  • Continual disclosures: Mandate that DPs and their immediate relatives disclose to the company any trades that exceed a value of ten lakh rupees within two trading days.
  • Company disclosures to stock exchanges: Promptly notify the stock exchanges of any continual disclosures received from insiders within two trading days.