Master Circular On Surveillance Of Securities Market

Posted On - 26 May, 2023 • By - King Stubb & Kasiva

SEBI, the regulatory body for securities and exchange in India, issued a Master Circular on September 13, 2022, to ensure consolidated information is available to market intermediaries. This Master Circular has been updated by SEBI vide circular no. SEBI/HO/ISD/ISD-PoD-2/P/CIR/2023/039 dated March 23, 2023. This Master Circular is a compilation of the circulars issued by the Integrated Surveillance Department of SEBI, which are operational as of the date of this circular.

  • One of the regulations pertains to the trading rules and shareholding pattern in dematerialized mode. Companies are required to achieve 100% dematerialized share ownership of promoters and promoter groups before trading their securities in the regular segment of the stock exchange. The stock exchanges must also ensure that the companies have complied with the disclosure requirements and that the same is publicly disseminated on the stock exchange website.
  • Another regulation deals with monitoring the circulation of unauthenticated news by SEBI-registered market intermediaries through various modes of communication. SEBI has directed these intermediaries to establish a proper internal code of conduct and controls. Employees must forward any market-related news only when approved by compliance officers. Access to social media platforms is to be under strict supervision, and logs of social media use should be kept as records by the concerned authorities.
  • The third regulation pertains to disclosure reporting under the SEBI (Prohibition of Insider Trading) Regulations, 2015. Companies must ensure that they have formulated and published a code of practices and procedures for fair disclosure of Unpublished Price Sensitive Information (UPSI) on their official website. The companies must also deal only with market intermediaries or other persons who have formulated a code of conduct as per the requirements of PIT Regulations.
  • The circular also includes regulations regarding reporting to stock exchanges regarding violations under SEBI (Prohibition of Insider Trading) Regulations, 2015 relating to the Code of Conduct (CoC), Automation of Continual Disclosures under Regulation 7(2) of PIT Regulations, and framework for restricting trading by Designated Persons (“DPs”) by freezing Permanent Account Number (PAN) at the security level.
  • Additionally, the circular allows for Offer for Sale (OFS) and Rights Entitlements (RE) transactions during trading window closure periods.
  • Overall, the Master Circular is a compilation of various circulars issued by the Integrated Surveillance Department (ISD) of SEBI, providing consolidated information on the regulations and guidelines for trading, monitoring, and disclosure reporting.[1]