A Structured Digital Database as required under SEBI 

(Prevention of Insider Trading) Regulations, 2015

Why Structured Digital Database?

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

Why Structured Digital Database?
Listed Companies
Intermediaries
Fiduciaries

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.

As per Law, SDD shall contain:
Log of UPSI Transfer

Details of communication of identified Unpublished Price Sensitive Information (‘UPSI’)

Identifiers of parties

PAN or other identifiers of the sender and recipient of UPSI to be stored

Details of UPSI

Nature of UPSI and the purpose of which the UPSI was shared with the recipient

Audit trail

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.

What is treated as UPSI?

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“Unpublished Price Sensitive Information” means: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:

SDD Check points

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

Benefits of having an SDD

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

With Legality’s inSiDDe₹ you can:

Create and Maintain SDD in tamperproof database

Add Insiders

Add Designated Persons

Intimate recipient of UPSI

Store Confidentiality Agreements

Generate Report. Keep Audit trail

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