Sebi' Latest Announcement....

Nebody knows about the Sebi's latest Announce .....?

CNBC-TV18 has learnt from sources that Sebi is likely to propose short swing rule in India. The move restricts company insiders from making short-term profit at the company’s expense.

It is a move that could potentially have a big impact on promoters of listed companies. Market regulator Sebi is proposing to put in place a new rule-the short swing rule- in India. This is similar to one that exists in the USA.
The rule prevents company insiders, who have greater access to material information, from taking advantage of the information to make short-term profits. So, Sebi proposes that company insiders buying and selling their company's stock within a 6-month period return the money they make to the company. As of now, this is just a consultative paper and the regulator has invited feedback to this proposal.

Sources added that the move proposes insiders return profits from buying and selling the company’s stock. It proposes a tenor of six months for the short swing rule.It has circulated a paper on short swing profit regulations.

Sebi has proposed last-in-first-out method to determine the six month period and the move is intended to check insider trading. The designated insider will include all key management personnel and directors of companies as well as officials who own above 10% stake in the company.

Sebi says that any officer who buys and sells shares of a company within six-months will have to return those profits to the company, which means that he cannot buy and sell shares within six months and make a profit on them. If he makes, he will return the profit.

Who cannot do these transactions or who will be brought under the ambit of this short swing rule?

It is a designated insider and a designated insider goes beyond the threshold of any person who holds 10%. An insider is basically defined as a person who would own more than 10% shares in a company. But here it says a designated insider would include all key management personnel.

It would include all directors of the company, all officers of the company who are beneficial owners of 10% or more stake in that company. So, a designated insider concept seems to be a far wider definition. They have given it a far wider definition than what an insider would be who owns only 10% in that company.

It is a draft proposal. They have invited suggestions to these proposals.

will effect tomorrow's market ...?

Pankaj

Source: Moneycontrol

And the fact they wouldn't show up as insider trading would be a loss (loss of a valuable cue) to the retail investor.

Regards,
Kalyan.

Hi,

I really dont think that it will have any kind of huge so called impact on investors or the market, as Big guys will keep playing Big games..

Hope all know what I mean by big games