On 21 March 2023, The Institute of Company Secretaries of India, conducted a live webinar on the Structured Digital Database (SDD) requirement under SEBI Regulations, 2015.
The panel of speakers for the webinar included:SEBI (Prohibition of Insider Trading)
Ms. Versha Agarwal, General Manager of SEBI ISD,
Mr. Avishkar Naik, Vice President of Surveillance, NSE,
Mr. BIjendra Chopra, Company Secretary, CIPLA Ltd, and
Ms. Shailashri Bhaskar, Practicing Company Secretary.
FAQs clarified in this webinar are:
- Can third-party SDD softwares be purchased and used?
Yes, SDD provided by third-party vendors can be purchased and used by companies as long as the SDD software is maintained in the company’s Databases/servers, and no third-party has access to the information in that database.
Note: Companies shall not store confidential data in databases/servers owned by third-party vendors, whether within India or abroad, as doing so violates SEBI’s regulations.
inSiDDer, by Legality Simplified, is one such software that is installed in the company’s databases/servers only, ensuring the protection of every client’s confidential data.
- Should the audit committee verify and track all the records of UPSI updated in the SDD?
Yes, the audit committee must verify and track all the records of UPSI updated in the SDD, and also ensure that all UPSI records are up-to-date.
- Does draft financial statements qualify as UPSI?
Yes, draft financial statements should be treated as UPSI and recorded as such.
- Do proposals and discussions, not yet finalized, qualify as UPSI?
Yes, the proposals and discussions for mergers, acquisitions, arrangements and all other price sensitive changes shall also be treated as UPSI and the same shall be maintained in SDD.
- Can Group entities maintain SDD in the same server?
Yes, Group entities can maintain SDD in the same server as long as every group entity segregates its SDD with an ‘Iron Curtain’. A group entity is prohibited from accessing the SDD maintained by another entity.
- Should the company entrust a specific person to update movement of UPSI in the SDD?
The company must authorize the Company Secretary, such other person, or group of people to update UPSI in a timely fashion. It is advisable to add the person authorized to update UPSI into the SDD, and in the code of conduct of the company, along with the time frame to update the SDD.
- Does the obligation to maintain SDD apply to debt listed entities?
Yes, all entities with any form of listed securities, including listed non-convertible debt, shall maintain SDD.
- Does the obligation to maintain SDD apply to entities listed in SME?
Maintaining an SDD is mandatory to all entities, irrespective of whether the securities are listed in NSE, BSE, SME, or any other stock exchange in India.
- Is it mandatory to maintain a Backup of the data stored in the SDD?
No. However, periodical backup of SDD data is advisable to maintain good compliance (with 8 years of data).
- Is it mandatory to submit a separate audit report on SDD, to the audit committee by the PCS?
No, it can be included in the Secretarial Audit report.
- Is the listed entity required to submit a compliance certificate if there is no UPSI transaction for a given term?
Yes, a nil compliance certificate shall be submitted, indicating that UPSI was not generated or transferred during that term.
Note: Financial statements are to be prepared on a quarterly basis and sharing of financial data falls under the purview of UPSI, and should be updated in the SDD.
- Is it mandatory to update details of trading window closure in the SDD?
No. The SDD is used to track movement of UPSI and not other compliances under SEBI (PIT) Regulations, 2015.
Do you have a software to create and maintain a Structured Digital Database (SDD)?
🔶 Is your SDD Tamper-proof?
🔶 Is your SDD covering all the requirements under PIT Regulations?
🔶 Can you add unlimited Designated Persons’, Insiders, and UPSI with ease?
Introducing inSiDDer, by Legality Simplified
A Structured Digital Database (SDD) software designed to enable organizations to record communication of all Unpublished Price Sensitive Information (UPSI) between two or more parties and meet the Compliance obligations under the SEBI (Prohibition of Insider Trading) Regulations, 2015.
BE COMPLIANT. BE SECURED.
BE AN InSiDDe₹.
Know More and Get A Demo Today!
Authors: Adv Alby Stephan, Legal Executive at Legality Simplified