SEBI Expands UPSI Definition to Enhance Market Integrity

The Securities and Exchange Board of India (SEBI) has expanded the scope of Unpublished Price Sensitive Information (UPSI). The new regulations include fundraising activities, credit rating changes, and management agreements. The amendments aim to enhance regulatory clarity and compliance. The new rules will be effective from June 10.

The Securities and Exchange Board of India (SEBI) has broadened the scope of Unpublished Price Sensitive Information (UPSI). This includes proposed fundraising activities and agreements that could affect company management or control, restructuring plans, and one-time bank settlements. The move is intended to provide greater regulatory clarity and uniformity in compliance across the market ecosystem.

SEBI's notification, issued on March 11, amends insider trading regulations, with the new rules taking effect from June 10. Key changes include considering any proposed fundraising, changes in credit ratings, and agreements affecting management or control as UPSI. Developments in corporate insolvency processes, fraud, defaults, and forensic audit outcomes also fall under the UPSI classification.

The revised regulations encompass additional scenarios such as the granting or withdrawal of critical licenses and regulatory approvals, and actions initiated by various authorities against key company figures. SEBI has also introduced flexibility in the structured digital database entry timeframe, enhancing procedural adaptability. The changes increase the categorized UPSI events from five to sixteen, aiming to reduce litigation and successful appeals related to UPSI identification.

(With inputs from agencies.)