5H. (1) The Chief Executive Officer / Managing Director of an asset management company with the approval of the trustee or such other analogous person of an intermediary or fiduciary, shall put in place adequate and effective system of internal controls to ensure compliance with the requirements given in these regulations to prevent insider trading. These internal controls shall include the following:
(a). All employees who have access to unpublished price sensitive information are identified as Designated Persons;
(b). All the unpublished price sensitive information shall be identified and its confidentiality shall be maintained as per the requirements of these regulations;
(c). Adequate restrictions shall be placed on communication or procurement of unpublished price sensitive information as required by these regulations;
(d). Lists of all employees and other persons with whom unpublished price sensitive
information is shared shall be maintained and confidentiality agreements shall be signed or notice shall be served to all such employees and persons;
(e). Periodic process review to evaluate effectiveness of such internal controls;
(f). Compliance of all other relevant requirements specified under these regulations
(2) The board of directors of an asset management company and the board of directors or
head(s) of the organisation of intermediaries and fiduciaries, shall also ensure that the Chief Executive Officer or the Managing Director or such other analogous person complies with these regulations.
(3) The Audit Committee of an asset management company or such other analogous body of an intermediary or fiduciary shall review compliance with the provisions of these regulations at least once in a financial year and shall verify that the systems for internal control are adequate and are operating effectively.
(4) Every asset management company shall with the approval of the trustees formulate written policies and procedures for inquiry in case of leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information and accordingly initiate appropriate inquiries on such leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information and promptly inform the Board promptly of such leaks, inquiries and result of such inquiries.
(5) An asset management company shall with the approval of the trustees have a whistleblower policy that is brought to the notice of their employees to enable them to report instances of leak of such unpublished price sensitive information .
(6) In case an inquiry has been initiated by an asset management company/ trustees in case of leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information, the relevant intermediaries and fiduciaries shall co-operate with the asset management company/ trustees in connection with such inquiry conducted by the asset management company/ trustees.”