Stock Market New Rules: SEBI has given information on the rules. Let us tell you in detail.
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Stock Market New Rules: New information has come out from the stock market regulator. SEBI has given new proposals. Market regulator SEBI has issued these rules regarding listed companies on Friday. Especially the new rules will also be applicable on relatives and PAN cards will also be frozen within the stipulated time. Let us tell you in detail.
What are SEBI’s new rules- The new rules are about trading window close. Let us first give you information about it. Actually “Trading Window Close” means that the company’s insiders cannot trade shares during that period, so that insider trading can be prevented. SEBI implements it to maintain the fairness and transparency of the market.
SEBI says that before the announcement of quarterly results, there is a preparation to include some more people in the provision of automatic closure of the “trading window”.
At present, the company’s directors, officers, etc. are included under this rule. But under the new rule, close relatives of all these people will also come under the purview of this rule. Its purpose is to prevent unintentional violation of insider trading rules.
In August 2022, for greater safety during the closure of the trading window, SEBI had issued guidelines to freeze PAN and stop trading by the depositories.
Now – PAN is being frozen by the stock exchange and depositories at a security level based on the information released by the listed company.
Earlier this rule was applicable to companies included in benchmark indices like Nifty 50 and Sensex. After this, in July 2023, SEBI made it mandatory for all companies.
The Securities and Exchange Board of India (SEBI) has sought responses on the new proposals by February 28.
SEBI’s definition says that the closest relative means the spouse of a person, and includes the parents, siblings and children of such person or spouse, any of whom is financially dependent on such person, or consults such person in taking decisions related to the business of the stock market.
SEBI said, “Nominees and their closest relatives will not be able to make any transactions in the stock market when the trading window is closed. He also said that the closure of the trading window will be applicable from the end of every quarter till 48 hours after the announcement of financial results.
When is the Trading Window closed? According to the information released on SEBI’s website, companies usually close the Trading Window before announcing quarterly and annual financial results, big deals, acquisitions or mergers.
Apart from this, it is closed before announcing bonus shares, stock splits or dividends.
Understand it like this – if a company has to declare its quarterly results on April 15, then as per SEBI rules, the “Trading Window” will be closed from April 1, so that the company officials or their family members cannot buy and sell shares by taking advantage of the confidential information of the results.
