The SEBI (Prohibition of Insider Trading) Regulations, 1992 incorporate several disclosure and other reporting requirements, the onus of which is cast on the Company, its Directors, Employees and also on intermediaries such as Investment bankers, Lawyers, Auditors, Brokers, etc. These Regulations seek to curb insider trading, price rigging, unfair practices, etc. by those in possession of certain vital and confidential information.

All Listed Companies must frame a Code of Internal Procedures and Conduct (on the lines of the specified Model Code) to Prevent Insider Trading. The salient features of this Model Code as applicable to Listed Companies are as follows :

1. Appointment of a Compliance Officer who shall be responsible for setting policies, procedures, monitoring adherence to the Code and its implementation, etc.

2. The company must designate employees who it feels would be privy to Confidential Information or to whom the Code should apply.

3. Employees/directors must maintain the confidentiality of all Price Sensitive Information and not pass it on directly or indirectly, by way of making a recommendation for the purchase or sale of securities. It should be handled on a "Need To Know" basis.

4. The company should specify a trading period, to be called "Trading Window", for trading in the company’s securities. When this window is closed, e.g., during declaration of results, the employees/directors cannot trade in the company’s securities.

5. Designated employees who intend to deal in the company’s securities (above a minimum threshold limit fixed by the company) must obtain pre-clearance for these transactions. They must hold the securities for minimum 30 days from the date when they allotted.

6. Designated employees should forward the prescribed details of their securities’ transactions and holdings including a statement for their dependent family members (as defined by the company) to the Compliance officer. The company must decide the periodicity for reporting.

1. Price-Sensitive Information means any information which relates directly or indirectly to a company and which if published is likely to materially affect the price of securities of company;

2. Certain information is deemed to be price-sensitive information, such as, details about mergers, takeovers, results declaration, buybacks/dividend, etc.

Employees / officers / directors of the company who violate the code of conduct shall, in addition to SEBI action, be subject to disciplinary action by the company, which may include wage freeze, suspension, ineligibility for future participation in ESOPs, etc.

All entities associated with securities markets should frame a Code of Internal Procedures and Conduct to Prevent Insider Trading in Listed Companies. This Code must be on the lines of the Model Code specified by the Regulations. Stock Brokers, Sub-Brokers, Transfer Agents, Investment Bankers, Registrars, Bankers to a Public Issue, Investment Adviser, Portfolio Managers, Asset Management Companies, Trustees of Mutual Funds, Professional firms such as Auditors, Accountancy Firms, Law Firms, Analysts, Consultants, etc., assisting or advising listed companies are covered by this requirement.