flowchart LR
A["PIT Operational <br> Architecture"] --> B["Schedule B <br> Listed Companies"]
A --> C["Schedule C <br> Intermediaries / Fiduciaries"]
A --> D["SEBI / Exchange <br> Surveillance and Initiatives"]
B --> B1[Designated Persons]
B --> B2[Trading Window]
B --> B3[Pre-Clearance]
B --> B4[Contra-Trade Restriction]
B --> B5[Disclosure Obligations]
B --> B6[Compliance Officer]
C --> C1[Information Barriers]
C --> C2["Restricted / Watch Lists"]
C --> C3[Employee Trading Rules]
D --> D1[Stock Watch System]
D --> D2[SMARTS Platform]
D --> D3[DAKSH Analytics]
D --> D4[SCORES Grievance System]
D --> D5[Investor Protection Fund]
%% Style
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class A,B,B1,B2,B3,B4,B5,B6,C,C1,C2,C3,D,D1,D2,D3,D4,D5 dark;
13 Model Code of Conduct for PIT, Trading Initiatives
ImportantLearning Objectives
By the end of this chapter, the reader will be able to:
- Identify the elements of the model code of conduct prescribed for listed companies under Schedule B and for market intermediaries and fiduciaries under Schedule C of the SEBI (Prohibition of Insider Trading) Regulations, 2015.
- Apply the operational rules of the trading window, pre-clearance, contra-trade restriction, designated person identification, and information handling to the day-to-day compliance practice of an Indian listed company.
- Explain the role and responsibilities of the compliance officer under the PIT Regulations and the LODR Regulations, and identify the principal sources of personal liability for the compliance officer.
- Identify the principal trading and surveillance initiatives operated by SEBI and the stock exchanges, including the Stock Watch System, the SMARTS surveillance platform, the DAKSH data analytics initiative, and the SCORES investor grievance system.
- Evaluate the design and effectiveness of the model code as an instrument of self-regulation, and identify continuing weaknesses in compliance practice that the regulator is likely to address in future reforms.
13.1 Introduction
Chapters 10, 11, and 12 set out the conceptual foundation, the procedural and enforcement architecture, and the principal amendments to the SEBI (Prohibition of Insider Trading) Regulations, 2015. This chapter takes up the operational implementation of the regime through the model code of conduct prescribed under Schedule B (for listed companies) and Schedule C (for market intermediaries and fiduciaries), and through the surveillance and trading initiatives operated by SEBI and the stock exchanges.
The model code is the principal instrument through which the substantive prohibitions of Regulations 3 and 4 are translated into the day-to-day compliance practice of Indian listed companies. Where the substantive prohibitions answer the question “what is forbidden”, the model code answers the question “what must the company do, on a daily basis, to prevent and detect violations”. The two halves of the regime are therefore complementary: the substantive rules without the operational code would be aspirational; the operational code without the substantive rules would be procedural.
The trading and surveillance initiatives operated by SEBI and the stock exchanges complement the company-level code by providing the regulator’s external view of trading activity. Where the model code operates within the company, the surveillance initiatives operate at the market level, monitoring patterns of trading across the exchanges for indicators of insider trading, market manipulation, or other misconduct. Together, the company-level code and the market-level surveillance constitute the compliance and detection architecture of the Indian insider trading regime.
13.2 Schedule B: Code of Conduct for Listed Companies
Schedule B sets out the minimum standards of the code of conduct that every listed company must adopt to regulate, monitor, and report trading by designated persons. The principal elements are summarised below.
13.2.1 Identification of Designated Persons
The first operational task under Schedule B is the identification of the designated persons of the company, that is, the persons within the company who, by reason of their function, are routinely or potentially in possession of UPSI. The category typically includes:
NoteDesignated Persons under Schedule B
The category of designated persons typically includes:
all directors of the company, whether executive, non-executive, or independent;
the key managerial personnel, including the chief executive officer, the chief financial officer, the company secretary, and the manager (if any);
all employees of the company, of every level, who may have access to UPSI by reason of their function, typically including those in the finance, accounts, treasury, internal audit, secretarial, mergers and acquisitions, investor relations, and senior management functions;
employees of holding, subsidiary, and associate companies who have access to UPSI;
employees of material subsidiaries who handle UPSI of the listed parent;
employees of group companies, vendors, and consultants who have been entrusted with UPSI in connection with specific transactions or activities, on an event-specific basis.
The list of designated persons must be reviewed periodically and updated to reflect changes in personnel, function, and the company’s business activities.
The identification of designated persons is the foundational step. All subsequent restrictions, including the trading window, pre-clearance, contra-trade, and disclosure obligations, apply only to designated persons. An over-narrow definition leaves persons with access to UPSI outside the regime; an over-broad definition burdens persons whose access to UPSI is theoretical rather than actual.
13.2.2 The Trading Window
The trading window is the principal mechanism by which the code prevents designated persons from trading during periods when UPSI is, or may shortly be, in their possession.
NoteTrading Window Mechanics
The trading window is closed during specified periods, including:
the period from the closing of the financial period (typically the financial quarter or year) until forty-eight hours after the publication of the financial results to the stock exchanges;
the period in which any UPSI relating to the company is in existence and not yet generally available, until forty-eight hours after the UPSI becomes generally available;
such other periods as the compliance officer may determine, on the basis of any specific event or activity.
During the period of closure, designated persons cannot trade in the securities of the company. The closure applies to direct trading by the designated person, to trading by the immediate relatives of the designated person, and to trading through any other person on behalf of the designated person.
The trading window operates as an automatic restriction. Designated persons do not need to receive specific notification of the closure for the closure to apply; the closure is implicit in the nature of the period (such as the financial result preparation period) or in the existence of UPSI. The compliance officer is responsible for ensuring that designated persons are aware of the closures, typically through routine email notifications, but the legal effect of the closure does not depend on the notification.
WarningThe Closure Begins When the Financial Period Closes, Not When Results Are Announced
A frequent compliance error is the assumption that the trading window closure begins only when the company starts compiling the financial results, or only on a specific date such as the end of the financial year. The closure begins at the close of the financial period (the end of the quarter or year) and continues until forty-eight hours after the public announcement of the results. For Indian listed companies, this typically means a closure of approximately four to six weeks following the close of each quarter, plus any additional event-specific closures. Designated persons must plan their trading around these closures, not vice versa.
13.2.3 Pre-Clearance
The pre-clearance requirement applies to trades by designated persons in the securities of the company exceeding a value threshold prescribed by the company in its code of conduct, typically ₹10 lakh in any calendar quarter or such other amount as the compliance officer may specify.
NotePre-Clearance Procedure under Schedule B
The procedure typically operates as follows:
The designated person submits an application for pre-clearance to the compliance officer, specifying the proposed trade, the security, the quantity, the proposed price range, and any relevant context.
The compliance officer verifies that the trading window is open, that the designated person is not in possession of UPSI, and that the proposed trade does not violate any other provision of the code.
If satisfied, the compliance officer grants pre-clearance, typically valid for a period of seven trading days from the date of grant.
The designated person executes the trade within the validity period of the pre-clearance.
Within two trading days of execution, the designated person reports the executed trade to the compliance officer, who records it and forwards the disclosure to the stock exchanges if required by Regulation 7.
The pre-clearance mechanism creates a documentary trail that supports any subsequent investigation. A trade undertaken without pre-clearance, where pre-clearance was required, is itself a violation of the code, regardless of whether the underlying trade would have been permitted had pre-clearance been sought.
13.2.4 Contra-Trade Restriction
The contra-trade restriction prohibits designated persons from entering into transactions that are opposite in direction within six months of an earlier transaction. The restriction is intended to prevent short-term trading patterns that, even if individually compliant with the trading window and pre-clearance, would be inconsistent with the long-term investment horizon expected of designated persons.
NoteOperation of the Contra-Trade Restriction
Where a designated person purchases securities of the company, the designated person cannot sell those securities for a period of six months from the date of purchase. Where a designated person sells securities of the company, the designated person cannot purchase securities of the company for a period of six months from the date of sale.
The restriction applies to opposite-direction transactions in the same security or in derivatives of the same security. It does not apply to transactions in the ordinary course of trading by independent persons such as market makers or specified categories of intermediary, where the company’s code so provides.
Exceptions are limited and specific: the compliance officer may, in exceptional circumstances and with the approval of the audit committee, grant a waiver in cases involving extreme personal hardship or other compelling circumstance. Such waivers are reportable in the company’s annual report and to SEBI on demand.
13.2.5 Whistleblower and Inquiry Mechanisms
Schedule B requires every listed company to establish a whistleblower mechanism for the reporting of suspected violations of the code or of the regulations. The mechanism must:
accept reports from any person, including employees, contractors, suppliers, and members of the public;
provide for reasonable confidentiality of the identity of the reporter;
provide for reasonable protection of the reporter against retaliation;
require the company to investigate reports of substance and to record the results;
require the company to report findings of substantial violation to SEBI; and
integrate with the inquiry on suspected leak procedure under Regulation 9A(5).
13.2.6 Internal Investigation and Reporting
Schedule B requires the company to maintain a procedure for internal investigation of suspected violations, with documentation of the steps taken and the findings reached. The audit committee or a designated independent committee of the board reviews the findings and determines the consequential action, including disciplinary action against the violator, disgorgement of any unlawful gain, and reporting to SEBI.
The company is required to report any substantial violation to SEBI promptly, with the relevant facts and any documentation supporting the finding. The reporting obligation is a meaningful constraint, since failure to report substantial violations is itself a violation of the regulations and can attract independent sanctions.
13.3 Schedule C: Code of Conduct for Market Intermediaries and Fiduciaries
Schedule C applies to market intermediaries (such as stock brokers, merchant bankers, asset managers, and depositories) and to fiduciaries (such as auditors, legal counsel, valuers, consultants, banks, and other professional advisers handling UPSI in a fiduciary capacity). The substantive content is parallel to Schedule B, but adapted to the distinctive operational features of intermediaries and fiduciaries.
13.3.1 Information Barriers (Chinese Walls)
The principal operational difference between Schedule B and Schedule C is the requirement, in Schedule C, of information barriers between functions of the intermediary or fiduciary that handle UPSI and other functions of the same entity. The barriers, sometimes called Chinese Walls, are intended to prevent the leakage of UPSI from the function in which it is properly held to functions in which it would create a conflict.
NoteInformation Barriers in Investment Banking and Asset Management
In an investment bank, the merchant banking team that advises a client on a proposed acquisition holds UPSI relating to the target. The same investment bank may have a research team that publishes recommendations on the target, a sales team that distributes the research to clients, and a proprietary trading desk that trades in the target’s securities. The information barrier prevents the UPSI from flowing from the merchant banking team to the research, sales, and proprietary trading teams. The barrier is operationalised through physical separation, electronic access controls, restricted communication policies, and supervisory review.
In an asset manager, the portfolio management team holds confidential information about the manager’s intended trades, which is itself UPSI in the sense that other market participants do not have access to it. The information barrier prevents this information from flowing to the manager’s marketing, distribution, and proprietary functions, and from the manager’s affiliated entities.
13.3.2 Restricted Lists and Watch Lists
Market intermediaries that handle UPSI maintain two operational lists. The restricted list is the list of securities in which trading by the intermediary’s employees, the intermediary’s proprietary book, and the intermediary’s research and distribution functions is prohibited. The watch list is the list of securities subject to enhanced surveillance and approval requirements, but where outright prohibition is not warranted.
A security is added to the restricted list when the intermediary becomes aware of UPSI relating to it through one of its functions, and is removed when the UPSI becomes generally available. A security is added to the watch list when the intermediary becomes aware of circumstances that warrant enhanced surveillance but do not yet rise to the level of UPSI requiring outright prohibition.
13.3.3 Employee Trading Rules
Schedule C requires market intermediaries to maintain detailed rules on personal trading by employees, typically more restrictive than the rules applicable to designated persons of listed companies. The rules typically include:
prohibition of trading in securities on the restricted list;
pre-approval requirement for all personal trading, with prior verification by the compliance function;
prohibition of certain types of trading, including short-term trading and trading in securities of clients of the intermediary;
periodic disclosure of personal portfolios to the compliance function;
prohibition of personal trading through unaffiliated brokers, requiring all personal trades to be executed through the intermediary’s own platform or a designated set of platforms.
13.3.4 Compliance Officer
Both Schedule B and Schedule C require the appointment of a compliance officer with prescribed qualifications and reporting lines. The compliance officer is responsible for the implementation of the code, the maintenance of the structured digital database, the determination of trading window closures, the grant or denial of pre-clearance applications, the conduct of inquiries on suspected leaks, and the reporting to the audit committee and to SEBI.
TipThe Compliance Officer Is the Critical Gatekeeper
The compliance officer is the critical gatekeeper of the insider trading framework within the company or intermediary. The quality of the compliance function depends substantially on the quality of the individual occupying this role. Indian listed companies and intermediaries have, over the past decade, invested progressively in the seniority, expertise, and reporting lines of the compliance officer, with the typical large listed company now appointing a compliance officer of substantial professional standing reporting directly to the audit committee.
13.4 Trading and Surveillance Initiatives
The market-level complement to the company-level code is the set of surveillance and trading initiatives operated by SEBI and the stock exchanges. The principal initiatives are summarised below.
13.4.1 Stock Watch System
The Stock Watch System operated by the stock exchanges (the National Stock Exchange and the BSE) is the first line of surveillance. It monitors trading patterns, price movements, and volume changes across all listed securities and flags patterns inconsistent with normal market activity. Flagged patterns are forwarded to the surveillance department of the exchange for preliminary examination and, where warranted, to SEBI for further investigation.
13.4.2 SMARTS
The Stock Markets Automated Tracking and Surveillance (SMARTS) platform is the principal market-level surveillance platform of SEBI. SMARTS aggregates trading data from the exchanges, applies a battery of algorithmic filters to identify suspicious patterns, and supports SEBI’s Integrated Surveillance Department in the conduct of preliminary examination and investigation.
The platform has been progressively strengthened since its initial deployment, with successive enhancements in the breadth of data integrated, the sophistication of the algorithmic filters, and the workflow management of the cases generated. SMARTS is the technological foundation of SEBI’s market integrity function.
13.4.3 DAKSH
The Data, Analysis, Knowledge, Surveillance (DAKSH) initiative, launched by SEBI in 2023, is the next-generation analytics platform. DAKSH integrates trading data, corporate filings, social media activity, and other data sources into a unified analytical environment, with machine learning models supporting pattern recognition and case generation.
DAKSH is intended to address two limitations of the earlier surveillance architecture. The first is the integration of structured trading data with unstructured information from corporate filings, news, and social media. The second is the application of machine learning to detect patterns that would not be visible through rule-based filters. The platform is in progressive deployment and is likely to shape SEBI’s surveillance capability over the coming decade.
13.4.4 SCORES
The SEBI Complaints Redress System (SCORES) is the centralised investor grievance system operated by SEBI. SCORES allows any investor to file a complaint against a listed company, an intermediary, or another regulated entity, and provides for the tracking of the complaint through to resolution. While SCORES is not primarily an insider trading detection mechanism, it provides a route through which retail investors and informed observers may bring suspected misconduct to SEBI’s attention.
13.4.5 Investor Protection Fund
The Investor Protection Fund, established under Sections 11(2)(j) and 26 of the SEBI Act, 1992, provides compensation to investors who have suffered loss as a result of regulatory violations, in cases where the violator is unable to pay. The fund is financed by penalties recovered by SEBI and by contributions from market participants. The fund has, in selected cases, been used to compensate investors who suffered loss as a result of insider trading and related misconduct.
13.4.6 Investor Protection and Education Fund
The Investor Protection and Education Fund, established under SEBI’s regulatory framework, supports investor education programmes, awareness campaigns, and research on investor protection. The fund has supported a range of initiatives, including financial literacy programmes, awareness campaigns on insider trading, and academic research on Indian market integrity.
13.5 Algorithmic Trading and Direct Market Access
The growth of algorithmic and high-frequency trading has introduced a new set of compliance considerations that intersect with the insider trading framework. The principal SEBI initiatives in this space include:
NoteAlgorithmic Trading Governance
SEBI’s algorithmic trading framework, contained in successive circulars from 2008 onwards, requires:
approval of algorithms by the stock exchanges before deployment;
audit trails of algorithmic order generation;
order-to-trade ratio limits to prevent excessive order generation;
self-trade prevention controls;
periodic review of algorithm performance and risk controls; and
specific governance for direct market access arrangements, in which institutional clients of brokers route orders directly to the exchange without broker intermediation.
The framework is designed to prevent the use of algorithms for market manipulation or for the exploitation of UPSI through high-speed trading.
The intersection between algorithmic trading and the insider trading framework is most acute where an institutional investor has both access to UPSI (for example, through a board observer or a research analyst) and the technological capability for high-speed trading. The compliance challenge is to ensure that the information barriers within the institutional investor are sufficient to prevent the UPSI from influencing the algorithmic trading.
13.6 Continuing Compliance Challenges
Despite the substantial progress of the post-2018 framework, several compliance challenges continue to confront Indian listed companies and intermediaries.
13.6.1 The Calibration of Designated Persons
The identification of designated persons remains a substantive compliance challenge. The pressure on the compliance function is to over-include rather than under-include, since the consequences of an under-inclusive list are severe. The over-inclusive approach, however, burdens the trading and disclosure functions of the company and may dilute the focus of the regime on the persons most likely to have access to UPSI.
13.6.2 The Speed of Modern Communications
The framework presupposes that UPSI flows through identifiable channels that can be captured in the structured digital database. The speed and informality of modern communications, including instant messaging, video conferencing, and ephemeral messages, complicate this assumption. A piece of UPSI shared in a casual instant message between executives may not be captured in the database and may not surface in any subsequent inquiry, even if it ultimately influences trading.
13.6.3 The Detection of Sophisticated Insider Trading
Sophisticated insider trading patterns, particularly those involving offshore entities, layered transactions, and the use of derivatives, continue to challenge the detection capability of even the most sophisticated surveillance platforms. The DAKSH initiative is, in part, a response to this challenge, but the cat-and-mouse dynamic between regulator and sophisticated wrongdoer is unlikely to be definitively resolved.
TipContinuing Investment in Compliance Pays Off
A practitioner observation worth emphasising is that companies and intermediaries that have continuously invested in compliance infrastructure, including the seniority of the compliance function, the technology supporting the structured digital database, the training of designated persons, and the integration of the compliance function with the broader governance of the company, are visibly less prone to the kind of compliance failures that lead to enforcement action. The investment in compliance is not a discretionary expense; it is a substantive form of risk management with direct effects on enterprise value.
13.7 Case Studies
13.7.1 Case Study 1: A Trading Window Compliance Failure
A pattern recurring in SEBI enforcement orders is the trading window violation by senior executives of listed companies. In a representative case from the past five years, the chief financial officer of a major Indian listed company traded in the company’s securities during the period of preparation of the quarterly financial results, in violation of the trading window closure under Schedule B. The company’s compliance officer had notified the closure, the executive was a designated person, and the trade was disclosed to the stock exchanges through the standard Regulation 7 disclosure.
SEBI imposed a substantial penalty on the executive and a smaller penalty on the company for the supervisory failure that allowed the violation to occur. The case illustrates the centrality of the trading window mechanism in operational compliance and the visibility that the disclosure regime provides to the regulator. A trade made in violation of the trading window is, by virtue of the disclosure regime, immediately visible and accessible for enforcement.
Discussion Questions
- To what extent should the company itself be liable for trading window violations by its designated persons, given that the company has put in place the formal compliance infrastructure?
- How should the regulator calibrate the sanction in cases of inadvertent trading window violations, where the executive demonstrably did not have UPSI but did trade during a closure period?
- What features of the post-2018 compliance framework are most likely to reduce the incidence of trading window violations over time?
13.7.2 Case Study 2: Information Barriers in an Indian Investment Bank
A major Indian investment bank, advising a client on a proposed acquisition of a listed Indian target, faced an internal information barrier failure when an employee of the investment bank’s research function obtained advance information about the proposed transaction from an employee of the merchant banking function and used it to trade in the target’s securities. SEBI investigated the matter, found violations of the regulations and the bank’s internal information barrier policies, and imposed penalties on the individuals involved as well as on the bank for the supervisory failure.
The case illustrates the practical operation of information barriers and the consequences of their failure. The investment bank’s policies had been formally adequate, but the implementation had been imperfect, with informal communication channels between the research and merchant banking teams that were not adequately monitored.
Discussion Questions
- What features of an information barrier in an Indian investment bank are most likely to be effective in practice, and which are most likely to be circumvented?
- To what extent should the regulator look beyond formal compliance with information barrier policies and assess the substantive culture of the institution?
- How should the regulatory framework adapt to the increasing use of digital and remote communication, which makes the maintenance of physical separation between functions more challenging?
13.7.3 Case Study 3: The Surveillance of a Suspicious Trading Pattern
In a representative case from SEBI’s surveillance work, the SMARTS platform flagged an unusual trading pattern in the securities of a mid-cap Indian listed company in the days before the company’s announcement of a substantial corporate development. The investigation that followed identified a chain of trades through several individuals connected by family and business relationships, leading back to a designated person of the company. The structured digital database maintained by the company recorded the access of the designated person to the relevant UPSI, supporting the inference of communication.
The case illustrates the operational effectiveness of the post-2018 surveillance and forensic infrastructure. The combination of market-level surveillance through SMARTS, company-level forensic records through the structured digital database, and the procedural framework of Section 11C investigation, enables the regulator to investigate suspected insider trading with substantially greater effectiveness than was possible under the pre-2018 framework.
Discussion Questions
- To what extent does the integration of market-level surveillance and company-level forensic records create a comprehensive detection architecture, and where do gaps remain?
- How should the surveillance architecture evolve to address sophisticated insider trading patterns involving offshore entities, derivatives, and high-speed trading?
- What lessons does the surveillance work of SEBI offer for the surveillance of other Indian regulators, including the Competition Commission and the Reserve Bank of India?
Summary
| Concept | Description |
|---|---|
| Schedule B Listed Company Framework | |
| Schedule B Listed Company Code | Code of conduct prescribed for listed companies under the PIT Regulations, comprising designated persons, trading window, pre-clearance, contra-trade, disclosure, and supervisory architecture |
| Schedule C Intermediary / Fiduciary Code | Code of conduct prescribed for market intermediaries and fiduciaries, comprising parallel obligations adapted to operational features including information barriers and restricted lists |
| Designated Persons | The persons within the company who, by reason of their function, are routinely or potentially in possession of UPSI, subject to the substantive trading restrictions of the code |
| Identification and Periodic Review | The continuing obligation to identify and periodically review the list of designated persons, capturing changes in personnel, function, and corporate activity |
| Trading Window | The principal mechanism by which the code prevents trading by designated persons during periods of UPSI exposure or financial-result preparation |
| Trading Window Closure Periods | Trading window closure during the financial period preparation, until forty-eight hours after results announcement, plus event-specific closures determined by the compliance officer |
| Pre-Clearance Procedure | Procedure requiring designated persons to obtain prior approval from the compliance officer for trades exceeding the prescribed value threshold, typically ₹10 lakh per quarter |
| Contra-Trade Restriction | Prohibition on designated persons entering into transactions opposite in direction within six months of an earlier transaction, supporting the long-term investment horizon |
| Whistleblower Mechanism | Mandatory mechanism allowing reports of suspected violations from any person, with confidentiality, anti-retaliation protection, and integration with the inquiry on suspected leak |
| Internal Investigation and Reporting | Procedure for company-level investigation of suspected violations, with audit committee review, disciplinary action, disgorgement, and reporting of substantial violations to SEBI |
| Schedule C Intermediary Framework | |
| Information Barriers (Chinese Walls) | The requirement, in market intermediaries, of separation between functions handling UPSI and other functions, operationalised through physical, electronic, and supervisory controls |
| Restricted List | The list of securities in which trading by the intermediary's employees, proprietary book, and research and distribution functions is prohibited because of UPSI access |
| Watch List | The list of securities subject to enhanced surveillance and approval requirements where outright prohibition is not warranted, operating as a heightened monitoring regime |
| Employee Trading Rules in Intermediaries | Detailed rules on personal trading by employees of intermediaries, typically more restrictive than the rules applicable to listed company designated persons |
| Compliance Officer Role | The critical gatekeeper of the framework within the company or intermediary, responsible for designated person identification, trading window management, pre-clearance, and reporting |
| Market-Level Surveillance Initiatives | |
| Stock Watch System | The first-line market surveillance system operated by stock exchanges, monitoring trading patterns, price movements, and volume changes across listed securities |
| SMARTS Platform | The principal market-level surveillance platform of SEBI, aggregating exchange data and applying algorithmic filters to identify suspicious trading patterns |
| DAKSH Initiative | The Data, Analysis, Knowledge, Surveillance initiative launched in 2023, integrating structured trading data with unstructured information using machine learning |
| SCORES Grievance System | The centralised investor grievance system of SEBI, allowing investors to file complaints and providing a channel through which suspected misconduct may surface |
| Investor Protection Fund | Fund established under Sections 11(2)(j) and 26 of the SEBI Act to compensate investors who have suffered loss as a result of regulatory violations where the violator cannot pay |
| Investor Protection and Education Fund | Fund supporting investor education, awareness campaigns, and research on investor protection, financed through SEBI's regulatory framework |
| Algorithmic Trading and DMA | |
| Algorithmic Trading Governance | SEBI framework requiring exchange approval of algorithms, audit trails, order-to-trade ratio limits, self-trade prevention, and governance of direct market access |
| Direct Market Access | Arrangement in which institutional clients of brokers route orders directly to the exchange without broker intermediation, subject to specific governance requirements |
| Continuing Compliance Challenges | |
| Designated Persons Calibration | The continuing compliance challenge of identifying designated persons broadly enough to capture all persons with potential access to UPSI without diluting the focus of the regime |
| Modern Communications Challenge | The challenge posed by instant messaging, video conferencing, and ephemeral messages to the structured digital database and the inquiry on suspected leak procedures |