All About UPSI Guidelines under SEBI – ICICI Direct

SEBI, the Securities and Exchange Board of India, is planning to expand the scope of UPSI, or Unpublished Price Sensitive Information. But what exactly does that mean?

Well, UPSI refers to key details about a company’s securities that have not been made public yet. If this information were to be revealed, it could have a significant impact on the share price. SEBI oversees UPSI under the Prohibition of Insider Trading Regulations, 2015.

So, what does SEBI’s framework around UPSI entail?

First off, SEBI wants to prevent any unfair advantages gained through insider trading, where individuals trade securities based on privileged information. Insiders can include directors, employees, and even consultants or auditors who have access to UPSI. To ensure transparency, companies must have systems in place to promptly share important information that could influence investors.

However, a recent SEBI study found that many companies were not interpreting UPSI broadly enough. Instead, they were only focusing on specific examples listed in the regulations, missing the bigger picture. This limited view led to inconsistencies in disclosures and the potential misuse of sensitive information.

To address this, SEBI is considering expanding the definition of UPSI. They are proposing to include things like fundraising decisions, corporate insolvency proceedings, management agreements, fraud investigations, regulatory actions, and significant business activities as UPSI. This move aims to bring more clarity and uniformity to how listed companies comply with insider trading regulations.

Ultimately, SEBI’s goal is to protect investors and ensure a fair and transparent marketplace for everyone involved. Let’s see how these proposed changes unfold in the near future.