A Structured Digital Database (SDD) as required under SEBI
(Prevention of Insider Trading) Regulations, 2015
SEBI through its insider trading Regulations mandates the creation and maintenance of a Structured Digital Database (‘SDD’) for the entity to constantly track the movement of insider data effective from 01 April 2019
As per Regulation 3(5) of SEBI
(Prevention of Insider Trading) Regulations, 2015, every Board of Director of the Company or Head of the Organizations (ie Intermediaries and Fiduciaries) shall create and maintain SDD.
Details of communication of identified Unpublished Price Sensitive Information (‘UPSI’)
PAN or other identifiers of the sender and recipient of UPSI to be stored
Nature of UPSI and the purpose of which the UPSI was shared with the recipient
Date and time of making entries in SDD to be captured along with the actual date and time when the UPSI was shared. Audit trail to be kept.
As defined by SEBI in its Regulation on Insider Trading
“Unpublished Price Sensitive Information” means:
Any information, relating to a company or its securities, directly or indirectly, that is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following:
- Financial results
- Dividends
- Change in capital structure
- Mergers, de-mergers, acquisitions, delisting’s, disposals
- Expansion of business and such other transactions
- Changes in key managerial personnel
Maintenance of
database should not be
outsourced.
Ensure non tampering
and store details of
records deleted
SDD to be maintained internally with adequate internal checks and Controls
Maintain details for 8 years from completion of relevant transaction (in case of any investigation preserve till completion of investigation)
Compliance officers shall certify compliance with maintenance of SDD to BSE and NSE
REPOSITORY OF UPSI
It serves as a repository of transmission of UPSI. So, that in case any insider trades while in possession of UPSI, it can be easily identified.
PROOF OF PURPOSE OF COMMUNICATION
No Insider shall communication UPSI to an outside other than for a legitimate purpose for performance of their services/ obligations. Hence, SDD will prove the purpose of communication of the insider Information.
USED TO WARD OFF ALLEGATIONS OF INSIDER TRADING
Where there are allegation of insider trading, the onus to prove there was no misuse of UPSI is with the Connected person.
TIMING OF POSSESSION OF UPSI RECORDED
Mere possession of UPSI at the time of trading can be considered as a grounds for violation of SEBI Insider Trading Regulations. Hence SDD proves when the insider has access to UPSI.
COMPLIANCE WITH THE REGULATION
Since Regulation 3(5) of the SEBI (Prevention of Insider Trading) Regulation, 2015 now mandates that a company should create and maintain an SDD, it would tantamount to non-compliance, if the same is not implemented
Create and Maintain SDD in tamperproof database
Add Insiders
Add Designated Persons
Intimate recipient of UPSI
Store Confidentiality Agreements
Generate Report. Keep Audit trail
Create and Maintain SDD with out software InSiDDer.
Add data to SDD. All the data points prescribed by SEBI in its regulations have been covered.
- Tamper Proof SDD
- Date of creation and subsequent edits are recorded in History – Forms part of Audit trail
- Maintain a log of information on insiders for easy retrieval
- Store confidentiality Agreements entered with the Insider
- Collect all mandatory information about Designated Persons
- Configure access to the SDD to these Designated Persons
- When added as Insider / Designated Person
- When UPSI Transfer is logged [ to the sender and Recipient ]
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The Technical Specification, Infrastructure Requirements
[hardware and software requirements]
vary depending on the choice of installation
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