Public Comments on the proposed IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026

Public Comments received during public consultation on the draft IFSCA (Prohibition of Market Abuse in Securities Markets) Regulations, 2026 S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. 1 Regulation 1 Preliminary While the short title and commencement An applicability clause would provide clarity to clause of the proposed IFSCA (Prohibition of entities operating in the IFSC on the scope and Short title and commencement Market Abuse in Securities Markets) relevance of the provisions, particularly given the Regulations, 2026 is standard and sufficient, diversity of business models and cross border (1) These regulations may be we suggest that an explicit ‘Applicability’ activities. It is to be noted that entities such as called the International clause be included to clearly set out the scope GAPs, which facilitate investment in foreign Financial Services Centres of the provisions. This would help entities equities traded on international exchanges, Authority (Prohibition of operating in the IFSC identify the already follow insider trading and market abuse Market Abuse in Securities requirements most relevant to their business rules in multiple jurisdictions under their Markets) Regulations, 2026. models. contractual obligations and therefore such entities It is pertinent to note here that the regulations shall be subjected to a proportionate application (2) They shall come into force and particularly the scope clause should of these Regulations. They are accordingly held on the date of their publication clearly mention that the said regulations accountable for the same and have proportional in the Official Gazette. should be applicable to the products, services penalties applicable on them. It is to be further and securities traded over IFSC based noted that these entities are only extending the exchanges and not to Global Access services of foreign regulated entities and any act Providers (“GAP”) which are facilitating or omission in this regard will not have any trades undertaken on international impact on IFSCA markets. exchanges. We also recommend introducing a Extending the scope of the proposed framework mechanism enabling entities, including may create duplicity of proceedings and double GAPs, to report any knowledge or jeopardy, since the same entity may be penalised information relating to potential instances of both under applicable laws and contractual insider trading or market abuse to the obligations. Authority. In this regard we would like to submit that instead of penalty provisions, for such entity, the regulations may provide for a formal reporting Page 1 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. mechanism for potential instances of insider trading or market abuse which would assist the Authority in early detection and prevention of such activities for maintaining international relations. 2 Regulation 2 Definitions: We are broadly aligned with the proposed Expanding the definition of “connected person” definitions of Insider, Connected Person, and to include additional categories as provided under Connected Person: Any person Material Non-Public Information (MNPI). the SEBI Prohibition of Insider Trading who is or has during the six However, we recommend the definition for Regulations, 2015 would ensure comprehensive months prior to the concerned connected persons should also address the coverage of relationships through which access to act been associated with a other categories of connected persons as laid Material Non-Public Information may arise. IFSC company, directly or indirectly, out in the regulation 2(1)(d)(ii) of SEBI entities dealing in foreign securities would in any capacity including by Prohibition of Insider Trading Regulations operate in a cross border environment, where reason of frequent 2015. price sensitive information is created and communication with its We also suggest that the information disclosed as per the rules of the home jurisdiction. officers or by being in any disclosed through recognised public sources Recognising disclosures made through contractual, fiduciary or in the home jurisdiction, such as filings with established sources, such as filings with the U.S. employment relationship or by the U.S. Securities and Exchange Securities and Exchange Commission, will help being a director, officer or an Commission, be treated as “generally ensure clarity and consistency. employee or holds any position available information” for the purpose of including a professional or these Regulations. business relationship whether temporary or permanent, that allows such person, directly or indirectly, access to material non-public information or is reasonably expected to allow such access. Page 2 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. Material non-public information: Any information, pertaining to a listed entity or its securities, directly or indirectly, which is not generally available and which upon becoming generally available, is likely to materially impact the price of the securities. An inclusive list of information considered as material has also been listed in the definition. Insider: Any person who is: a) a connected person; or b) in possession of or having access to material non-public information; 3 Regulation 2 Definitions: It is suggested that the definition of The term “Deemed to be Connected Person” may “connected person” be expanded to explicitly be defined to ensure comprehensive coverage of Connected Person: Any person incorporate the concept of “deemed to be individuals who, though not formally associated who is or has during the six connected persons”, in line with the with an entity, but could reasonably be expected months prior to the concerned framework as prescribed under the Securities to have access to inside information due to their act been associated with a and Exchange Board of India (Prohibition of relationship, proximity, or dealings with the company, directly or indirectly, Insider Trading) Regulations, 2015. entity. The inclusion is essential to strengthen the in any capacity including by Accordingly, in addition to clause 2 (c), an effectiveness of insider‑trading enforcement, and reason of frequent inclusive deeming provision may be maintains continuity with the existing SEBI communication with its introduced to cover specified categories of framework which are currently applicable for officers or by being in any persons such as immediate relatives, entities operating in IFSCs. Page 3 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. contractual, fiduciary or intermediaries, fiduciaries, professionals, and employment relationship or by other persons who, by virtue of their being a director, officer or an relationship or function, are reasonably employee or holds any position expected to have access to material non- including a professional or public information (MNPI). business relationship whether temporary or permanent, that allows such person, directly or indirectly, access to material non-public information or is reasonably expected to allow such access. Material non-public information: Any information, pertaining to a listed entity or its securities, directly or indirectly, which is not generally available and which upon becoming generally available, is likely to materially impact the price of the securities. An inclusive list of information considered as material has also been listed in the definition. Insider: Any person who is: a) a connected person; or Page 4 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. b) in possession of or having access to material non-public information; 4 Regulation 3 Prohibits It is suggested that the Authority provide an The term “legitimate purpose” is principle-based communication/procurement illustrative list of activities that may and may result in inconsistent internal of MNPI except for legitimate constitute “legitimate purpose”, similar to classifications across entities. Indicative guidance purpose, duties or legal global frameworks, to ensure consistent such as inclusion of due-diligence, investor obligations. interpretation by intermediaries. meetings, statutory audits, transaction negotiations, this will facilitate uniform implementation and reduce supervisory ambiguity. 5 Regulation 3 3(1) No insider shall Insert an explicit carve-out clarifying that While “legitimate purpose” is recognised, the communicate, procure, sharing of MNPI in connection with bona absence of explicit inclusion of M&A and provide, or allow access to any fide transactions such as mergers & takeover transactions may create interpretational material non-public acquisitions, takeovers and open offers shall ambiguity. Such transactions inherently require information, relating to a be deemed to be for “legitimate purposes”, sharing of MNPI for due diligence, valuation and company or securities listed or subject to confidentiality obligations. execution. In open offers, regulatory frameworks proposed to be listed, to any already ensure equal price discovery and full person including other insiders disclosure through the letter of offer, mitigating except where such information asymmetry concerns. An explicit communication is in carve-out will provide clarity and facilitate ease furtherance of legitimate of doing business in IFSC. purposes, performance of duties or discharge of legal obligations. 6 Regulation 3 3(2) Any person in receipt of It is recommended to insert an explanation Defining legitimate purpose will give clarity that material non-public after Regulation 3(2) defining legitimate what consists of material non-public information information pursuant to a purpose, the text of which is reproduced and by whom it is shared. “legitimate purpose” shall be below: considered an “insider” for Page 5 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. purposes of these regulations Explanation – For the purpose of these and such persons shall maintain regulation, the term “legitimate purpose” confidentiality of such material shall include sharing of material non-public non-public information in information in the ordinary course of compliance with these business by an insider with partners, regulations. collaborators, lenders, customers, suppliers, lead manager, legal advisors, auditors, or other advisors or consultants, provided that such sharing has not been carried out to evade or circumvent the prohibitions of these regulations. 7 Regulation 4 Trading when in possession of We agree that restricting trading while in GAP entities facilitate trades that are executed on material non-public possession of Material Non-Public foreign exchanges through overseas broker- information Information (MNPI) are appropriate and dealers and clearing systems, where surveillance aligned with SEBI framework and global and enforcement mechanisms are already well insider trading standards. established. In such cases, trading activity is subject to monitoring under the legal and For GAP entities in the IFSC dealing in regulatory framework of the relevant jurisdiction, foreign securities, we request that the including oversight by regulators such as the U.S. Authority may clarify that compliance with Securities and Exchange Commission and applicable regulations of the relevant foreign exchange-level surveillance systems. jurisdiction, such as insider trading laws enforced by the U.S. Securities and Exchange Recognising compliance with such frameworks Commission, which entities such as GAPs would help avoid duplication of controls and are contractually obligated to follow through ensure consistency in regulatory expectations. their custodian brokers, may be considered It is submitted that a clear demarcation maybe compliant also under these regulations. created in the proposed regulations, wherein, in the event an intermediary is merely facilitating Further, we request that it may be clarified services of a foreign regulated entity – that possession of MNPI should be assessed compliance with such applicable foreign Page 6 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. with reference to the specific function of the jurisdiction laws shall be deemed sufficient and entity undertaking the trading activity and not would not require additional compliances to be attributed across the entire followed under the said regulations, provided, entity/organisation where appropriate such non-compliances do not impact IFSCA information barriers and segregation are markets, whether directly or indirectly. already in place. 8 Regulation 4 Trading when in possession of It is suggested that the Authority provide a IFSC entities frequently operate in multi- material non-public cross-border MNPI protocol, clarifying jurisdictional structures. Lack of a harmonised information obligations where: MNPI protocol may create inconsistent a) MNPI originates outside India, b) interpretations and enforcement challenges. Clear information is shared among group entities in expectations for cross-border information multiple jurisdictions, or c) global time-zone handling would align IFSC with international differences create gaps in dissemination. centres like DIFC, MAS and FCA’s regime. 9 Regulation 4 4(f) trades were pursuant to an Provide a detailed framework for trading Trading plans serve as an important defence irrevocable trading plan plans, including: (i) prior approval by mechanism for insiders. However, absence of a disclosed to the stock Compliance Officer; (ii) explicit requirement detailed governance framework may lead to exchange (s) 120 days in of irrevocability; (iii) clear cooling-off misuse or inconsistent application. Aligning with advance, setting out either period; (iv) specification of price limits; (v) SEBI PIT framework will ensure robustness, value of trade or number of disclosure requirements; and (vi) oversight transparency and regulatory certainty, while securities to be traded, upper by Audit Committee/Board in case of non- preventing abuse of trading plans. price limit for a buy trade, implementation. lower price limit for a sell trade and such other conditions, if any, specified by the Authority. 10 Regulation 4 Trading when in possession of It is suggested to include the following By insertion of explanation, there would be clarity material non-public explanation: that trades executed while in possession of information material non‑public information (MNPI) are No insider shall trade in securities that are presumed to be influenced by such information. listed or proposed to be listed when in This removes ambiguity in enforcement and the Page 7 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. possession of material non-public burden and onus to prove the insider trading information would be on the insider only. Explanation –When a person who has traded in securities has been in possession of material non-public information, his trades would be presumed to have been motivated by the knowledge and awareness of such information in his possession. Provided that…… 11 Regulation 5 Disclosure by insiders trading Suggestion 1: Initial Disclosures By mandating disclosure within seven days, the in securities company establishes an initial benchmark against To insert a provision requiring disclosures which all future trades by these individuals can be upon appointment: monitored. Disclosures by certain persons This strengthens the ability to detect unusual or potentially unlawful trading patterns, enhances Every person on appointment as key traceability, transparency and ensures timely managerial personnel or a director of the compliance, and contributes to maintaining the company or upon becoming a promoter or integrity of securities markets within IFSCs. member of the promoter group shall disclose his holding of securities of the company as on The provision for disclosures by connected the date of appointment or becoming a persons gives listed entities the flexibility to promoter, to the listed entity within seven monitor compliance with market‑abuse rules. days of such appointment or becoming a Though not formal insiders, such individuals may promoter. access material non‑public information through professional or transactional relationship with the company. Allowing companies to require disclosure of their holdings and trades strengthens Page 8 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. Suggestion 2: Disclosures by Other transparency and reduces undisclosed Connected Persons transactions. Insert an enabling provision: Disclosures by other connected persons. (3) Any entity whose securities are listed on a stock exchange may, at its discretion require any other connected person or class of connected persons to make disclosures of holdings and trading in securities in such form and at such frequency as may be determined by the company in order to monitor compliance with these regulations 12 Regulation 5 Disclosure by insiders trading While we agree with the insider disclosure GAP entities act as intermediaries facilitating in securities provisions; we request that, for GAP entities access to foreign securities and do not have a in the IFSC dealing in foreign securities, it be control over the underlying foreign issuers. clarified that such disclosure obligations Therefore, requiring disclosures to be made to apply only to securities and products such companies may not be practical. provided in IFSCA jurisdiction. Further, as suggested above, a mechanism may be Further, foreign issuers are governed by the introduced for GAP entities, to report any disclosure frameworks of their home knowledge or information relating to jurisdictions, and intermediary entities may not be potential instances of insider trading or recognised participants within those frameworks. market abuse to the foreign regulated partner Thus, we would recommend that in case of such and the Authority. As the term ‘company’, instances, reporting the same to the regulated here, would refer to an entity incorporated in foreign partner should suffice and further a foreign jurisdiction (such as the United intimation may be given to the Authority for States), which is outside the reach of such auditory purposes. Clarifying that disclosures are intermediary entities. Page 9 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. to be made to the Authority would ensure a clear reporting channel. 13 Regulation 5 5(1) Every Insider shall Restrict disclosure requirements to specified The current provision is significantly broader disclose to the company the categories such as promoters, directors and when compared to the similar SEBI PIT number of such securities designated persons, in line with SEBI PIT Regulations and may create operational acquired or disposed of by Regulations, instead of “every insider”. challenges and excessive reporting burden, him or his immediate relatives, especially for incidental or temporary insiders. within two trading days of Aligning with SEBI will ensure proportionality, such transaction if the value reduce compliance burden and maintain traded, whether in one regulatory consistency. transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of USD twenty five thousand. 14 Regulation 5 New Regulations We propose that every person, upon The consultation paper is currently silent on such appointment as a Key Managerial Personnel disclosures. This requirement will strengthen (KMP), director, promoter, or member of the internal controls and enable effective monitoring promoter group, should disclose their of transactions and holdings of key individuals. holdings in the company’s securities within seven days of such appointment or change, and thereafter on a quarterly basis. 15 Regulation 6 Prohibition of certain dealings While we agree with the prohibition of Instances of market-wide manipulation or fraud in securities fraudulent dealings, we request that, for GAP may occur outside the direct control or visibility entities operating in the IFSC and dealing in of the GAP entity. Clarifying the scope of foreign securities, the scope of their responsibility would help ensure that regulatory responsibility be clarified, particularly in expectations remain proportionate to the role of relation to activities occurring on foreign the intermediary. It may be clarified that that a exchanges. clear demarcation maybe created in the proposed regulations, wherein, in the event an intermediary Page 10 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. It may be further clarified that GAP entities is merely facilitating services of a foreign would be responsible only for conduct within regulated entity – their control, such as client onboarding, order compliance with such applicable foreign routing, and monitoring, and would not be jurisdiction laws shall be held accountable for market-wide deemed su􀆯icient and would not require manipulation or fraudulent activities, additional compliances to be followed under the occurring at the level of foreign exchanges said regulations, provided, such non-compliances that are beyond their control. do not impact IFSCA markets, whether directly or indirectly. 16 Regulation 7 Prohibition of manipulative, We request that terms such as “aid”, “assist”, In the absence of clear qualification, broad terms fraudulent and unfair trade or “participate” under Clause 7(2) is clarified such as “aid”, “assist”, or “participate” may create practices to refer to active involvement or knowledge ambiguity and could result in unintended and not extend to routine intermediary attribution of liability to intermediaries functions. This is particularly relevant for performing routine functions. GAP entities operating on an execution-only basis (such as order routing and trade transmission), where absence of such clarification may attribute liability despite no role in trading decisions. We recommend the same in line with principles under the SEBI PFUTP framework. 17 Regulation 7 Prohibition of manipulative, It is suggested that the Authority clarify the IFSC is a cross-border marketplace connected fraudulent and unfair trade treatment of market-abuse cases where the with global trading venues, funds, and benchmark practices misconduct occurs partly outside IFSC but providers. Misconduct often spans multiple impacts securities or benchmarks referenced jurisdictions. Clear guidance on cross-border within IFSC, including the possibility of enforcement cooperation (recognition, reciprocal recognition of foreign information-sharing, joint action mechanisms) enforcement orders. will significantly enhance deterrence and align IFSC with global practices followed by MAS, FCA and DFSA. Page 11 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. 18 Regulation 8 Market Manipulative Conduct It is suggested that the Authority provide Certain provisions under Regulation 8 appear to -Broad Definition further clarity on whether determination of classify conduct as market manipulation based market manipulation shall be based on intent, primarily on outcome or price impact. In effect, or both, particularly in cases involving relatively less liquid IFSC markets, legitimate legitimate trading activity. institutional trades, portfolio rebalancing, or hedging transactions may inadvertently impact price or trading volume. In absence of clarity regarding intent-based assessment, bona-fide transactions may be subject to regulatory scrutiny. Clarification on whether intent, pattern, and surrounding circumstances will be considered would provide greater regulatory certainty and encourage institutional participation in IFSC markets. 19 Regulation 8(t) Short sell securities in the It is suggested that the clause relating to short Short selling is a legitimate market activity widely hope of driving the price selling be clarified to distinguish between permitted across global markets for price down" treated as manipulative legitimate short selling and manipulative discovery and liquidity enhancement. The current practice. short selling practices. wording may unintentionally classify legitimate short selling as market manipulation. Clarifying that only abusive or manipulative short selling practices (e.g., coordinated short attacks, false information dissemination) are prohibited will avoid regulatory uncertainty and support healthy market functioning. 20 Regulation 12 Chinese Wall arrangements as It is suggested that the Authority prescribe While the regulation allows reliance on Chinese defense minimum standards for Chinese wall wall arrangements, absence of minimum arrangements, including governance standards may lead to inconsistent structure, access controls, monitoring implementation across market participants. mechanisms, and audit requirements. Specifying baseline requirements such as information barriers, restricted lists, monitoring Page 12 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. logs, and periodic compliance audits will enhance credibility of this defense and align with global regulatory practices. 21 Regulation 13 13(1) Entity listed on the Prescribe minimum contents or a standard While mandating a Code of Conduct is recognised stock exchange of format for the Code of Conduct, or expressly appropriate, absence of minimum standards may International Financial empower the Authority to issue detailed lead to inconsistent practices across entities. Services Centre or registered guidelines/templates. Providing a standard format or minimum with the authority, or any requirements (similar to SEBI PIT Regulations) fiduciary shall put in place will ensure uniformity, improve compliance adequate and effective system quality, and aid supervisory oversight. of internal controls and a code of conduct to ensure compliance with these regulations to prevent market abuse 22 Regulation 13 Institutional Mechanism for It is suggested that the Authority adopt a IFSC market participants include global Prevention of Market Abuse proportionate compliance framework based institutions, boutique intermediaries, proprietary on size, trading volume, and nature of trading firms, and fintech platforms. Uniform intermediaries operating within IFSC. compliance requirements may create disproportionate burden for smaller participants while being insufficient for large institutions. A proportionate, risk-based compliance framework would promote ease of doing business while ensuring robust market abuse prevention mechanisms. 23 Regulation 13 It is also suggested that the Authority Market-abuse schemes in international centres incorporate a centralised IFSC-wide Market often span multiple intermediaries and trading Abuse Surveillance Repository (MASR) venues. A centralised repository would enabling regulated entities to report significantly strengthen systemic surveillance, suspicious patterns in anonymized form to reduce information silos and allow IFSCA to Page 13 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. facilitate early detection of cross-entity detect coordinated behaviour across market manipulation. participants. 24 Overall - While we agree that the proposed framework The proposed framework seeks to address a wide Recommendation is comprehensive and aligned with global range of market abuse scenarios across diverse on IFSCA standards, we recommend that the framework market participants and operating models; in such (Prohibition of may also recognise applicable foreign a context, recognising established regulatory Market Abuse in regulatory frameworks (such as those frameworks, and clarifying accountability based Securities overseen by the U.S. Securities and on control and oversight would help ensure Markets) Exchange Commission and Financial consistency. Regulations, Industry Regulatory Authority) and reflect 2026 role-based proportionality. Further, incorporating elements such as intent, safe harbours, and proportionality in enforcement Given that entities such as GAP would would provide greater clarity in regulatory operate on an execution-only basis and rely outcomes. This would support a balanced on third party execution platforms and approach that effectively deters misconduct while foreign market infrastructure, we submit that ensuring operational complexities are accountability may be assessed based on the appropriately considered. level of control and oversight exercised and limited to the systems and information reasonably available to such entities. This would ensure that system-driven conduct beyond their control is not inadvertently attributed to IFSC entities. Additionally, we recommend that the framework may: (i) incorporate the element of intent (mens rea) and provide clear illustrations to reduce ambiguity in determining market abuse, Page 14 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. (ii) include appropriate safe harbours for bona fide, system-driven conduct undertaken with reasonable controls, (iii) adopt guiding principles on proportionality in enforcement, linking penalties to the nature of conduct, level of intent, and actual market impact. (iv) a framework under which entities established in the IFSC shall maintain such internal controls and databases as necessary to ensure compliance with these Regulations. 25 General - It is suggested that the Authority clarify Market abuse may occur not only in secondary applicability of market abuse provisions in market trading but also in primary market primary market transactions, including IPOs, activities such as price stabilization, anchor private placements, and structured issuances. allocations, or pre-listing transactions. The proposed regulations primarily appear focused on secondary market conduct. Clarifying applicability to primary market transactions will ensure comprehensive coverage and reduce interpretational ambiguity. 26 Proposal for new Applicability We request the inclusion of a separate section Clear provisions on applicability will eliminate Regulations clearly defining the applicability of these ambiguity among various entities regarding Regulations. While Regulation 5 specifies compliance requirements under these applicability to listed companies, Regulation Regulations. 6 only references “securities” as defined under clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956. We would like to highlight that multiple market participants operate in GIFT City, including Fund Management Entities Page 15 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. (FMEs), broker-dealers, distributors, stock brokers, companies, etc. Accordingly, we request clarification on the entities to whom these Regulations apply and the extent of such applicability. 27 Proposal for new We request the establishment of an Investor In mainland India, The SEBI Investor Protection Regulations Protection and Education Fund (IPEF) in and Education Fund (IPEF), established under the GIFT City. SEBI Act, 1992 is already created for the said It will be primarily designed to enhance purposes investor awareness, protect interests, and provide financial education. Key objectives may include conducting educational programs, supporting research activities, funding investor associations, facilitating legal action, and providing restitution from disgorged funds. In mainland India, the SEBI Investor Protection and Education Fund (IPEF), established under the SEBI Act, 1992, already serves these purposes effectively. 28 Proposal for new - We recommend introducing a The informant framework, introduced through Regulations whistleblower/informant framework similar Chapter IIIA of the SEBI (Prohibition of Insider to that under the SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations") Trading) Regulations. effective December 26, 2019 An informant framework enables individuals to report insider trading violations by submitting original information directly to the authority, while ensuring confidentiality, protection against retaliation, and potential monetary incentives Page 16 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. 29 Proposal for new - We propose adding a provision clarifying the The current consultation paper does not address Regulations burden of proof: in the case of connected the burden of proof regarding possession of UPSI. persons, the onus to demonstrate non- Clear allocation of responsibility will strengthen possession of unpublished price sensitive enforcement and reduce ambiguity. information (UPSI) should lie with such persons, while in other cases, the onus should lie with the Company. 30 - - Introduction of Systematic electronic • A mandatory, internally maintained database: electronic database is crucial for strengthening governance over the handling of material non It is suggested that the regulations mandate public information (MNPI). every listed entity to maintain a systematic electronic database: • It enables structured oversight and effective prevention of market abuse. By ensuring (1) The board of directors or head(s) of the accurate recording of transactions, controlled organisation of every person required to access, and continuous monitoring of sensitive handle material non-public information shall information, such a system promotes ensure that a Systematic electronic database accountability and transparency. is maintained containing the nature of material non-public information and the • It also supports timely detection of names of such persons who have shared the irregularities, safeguard data integrity, deter information and also the names of such tampering and reinforces the organization’s persons with whom information is shared ability to demonstrate compliance during under this regulation along with the supervisory reviews or regulatory assessments. Permanent Account Number or any other identifier authorized by law where Permanent • Further, the introduction of an Annual Account Number is not available. Compliance Certificate to confirm the compliance status of the systematic electronic database is Such database shall not be outsourced and consistent with Regulation 3(5) and 3(6) of the shall be maintained internally with adequate SEBI (Prohibition of Insider Trading) Page 17 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. internal controls and checks such as time Regulations, 2015, as well as the SEBI issued stamping and audit trails to ensure non- FAQs and the circulars released by NSE and BSE, tampering of the database. which collectively require all listed entities to formally verify compliance with Structured Provided that entry of information, not Digital Database (SDD) provisions. emanating from within the organisation, in material non-public information may be done • Such verification may be provided not later than 2 calendar days from the receipt through the Annual Secretarial Compliance of such information. Report or a separate SDD Compliance Certificate certified by a Practicing Company Secretary. This (2) The board of directors or head(s) of the measure strengthens regulatory oversight, organisation of every person required to promotes ongoing adherence to disclosure handle unpublished price sensitive requirements, and enhances the overall information shall ensure that the material effectiveness of monitoring and enforcement of non-public information is preserved for a Regulations. period of not less than eight years after completion of the relevant transactions and in the event of receipt of any information from the Authority regarding any investigation or enforcement proceedings, the relevant information in the material non-public information shall be preserved till the completion of such proceedings. It is further suggested to introduce an Annual Compliance Certificate, confirming the compliance status of Systematic electronic database in line with SEBI (Prohibition of Insider Trading) Regulations, 2015, SEBI Page 18 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. issued FAQs and the circulars issued by NSE and BSE. 31 - - It is suggested to include general provisions • The general disclosure provisions are to clarify that: crucial for ensuring full transparency over the • Disclosures shall include trades by trading activities of insiders and individuals immediate relatives and persons for whom whose trading decisions they influence. the insider takes trading decisions; • Trading in derivatives shall be • The draft framework underscores the included; importance of strong oversight and structured • Records shall be maintained for a compliance mechanisms within regulated entities minimum period of five years. to minimise the risk of misuse of material non‑public information. • By requiring disclosures to cover trades by immediate relatives and other persons on whose behalf insiders make trading decisions, the regulation prevents indirect circumvention of reporting obligations. • Including derivative transactions within the scope of disclosures enables comprehensive monitoring of an insider’s total economic exposure. • Requiring disclosures be maintained for at least five years ensures the availability of a reliable audit trail, enabling effective review, internal investigation etc. Page 19 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. Together, these measures strengthen transparency, deter misconduct, and reinforce the integrity of the compliance ecosystem. 32 - - General Suggestions: • The proposed framework enhances the internal governance and accountability by clearly defining the roles and responsibilities of the • To introduce a provision allowing Compliance Officer and oversight committee in insiders to formulate and submit a trading relation to trading plans. plan to the designated Compliance Officer for review, approval, and disclosure. • It provides clarity and certainty for insiders and regulators regarding the execution or • Empower the Compliance Officer to non-execution of planned trades. assess the plan for potential regulatory concerns, seek necessary undertakings from • Exempting approved trading plans from the insider, and monitor its implementation. trading window restrictions ensures that planned transactions are not unnecessarily delayed • Provides that the trades executed pursuant to an approved plan should be • The requirement for oversight, exempt from trading window restrictions. documentation, and timely reporting enhances transparency, market integrity, and regulatory • Require Insiders to promptly inform compliance. the Compliance Officer with reasons and supporting documentation, In the event of • Overall, such a framework promotes a full or partial non-execution of the plan. robust compliance culture within regulated entities. • Mandate the Compliance Officer to place this information, along with their recommendations, before an appropriate oversight committee, which would determine Page 20 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. whether the non-implementation was bona fide. • Require the Compliance Officer to communicate the committee’s decision to the regulator and, where applicable, take action in accordance with the entity’s internal code of conduct. • Prescribe clear timelines for approval, review, and reporting, to ensure accountability and transparency. 33 - - It is suggested to introduce a regulatory • Introducing a chapter modeled on SEBI’s framework for IFSC entities, modeled on Chapter IIIA would strengthen the governance Chapter IIIA of SEBI (Prohibition of Insider and compliance ecosystem within IFSC entities Trading) Regulations, 2015, to establish a by encouraging proactive reporting of potential voluntary information disclosure and insider trading violations, thereby enhancing incentivization mechanism for reporting market integrity. It would create a structured and violations related to insider trading or misuse confidential mechanism for informants, provide of Material Non-Public Information (MNPI). protection against retaliation, and incentivize reporting through clearly defined reward This would define the eligibility of provisions. Such a framework promotes informants, provide a mechanism for transparency, reinforces accountability, and foster submission of original information, ensure a robust culture of compliance and investor confidentiality and protection against protection in the International Financial Services retaliation, and outline the criteria for Centre. determination and disbursement of rewards to informants. Page 21 of 22S. Regulation No. Text of the Regulation Comments / Suggested Modifications Detailed Rationale No. This framework may also empower IFSCA to constitute an Informant Incentive Committee to administer the process and ensure timely and transparent evaluation of reported information. IFSCA Response: Based on the comments received, the draft regulations were suitably modified and placed before the Authority in the meeting held on July 24, 2026. The above comments/ suggestions were also placed before the Authority. Page 22 of 22