valid as on 26/03/2020

Regulation 7A. Definitions
Effective date 26.12.2019

7A. (1) In this Chapter, unless the context otherwise requires:-

(a) ‘Investor Protection and Education Fund’ means the Investor Protection and Education Fund created by the Board under section 11 of the Act;

(b) ‘Informant’ means an individual(s), who voluntarily submits to the Board a Voluntary Information Disclosure Form relating to an alleged violation of insider trading laws that has occurred, is occurring or has a reasonable belief that it is about to occur, in a manner provided under these regulations, regardless of whether such individual(s) satisfies the requirements, procedures and conditions to qualify for a reward;

(c) ‘Informant Incentive Committee’ means the High Powered Advisory Committee constituted by the Board in the manner as may be specified under regulation 11 of the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018.

(d) ‘insider trading laws’ means the following provisions of securities laws,-

i. Section 15G of the Act;
ii. regulation 3 of these regulations;
iii. regulation 4 of these regulations;
iv. regulation 5 of these regulations; and
v. regulation 9 or regulation 9A of these regulations, in so far as they pertain to trading or communication of unpublished price sensitive information.

(e) ‘irrelevant, vexatious and frivolous information’ includes, reporting of information which in the opinion of the Board, –

(i) Does not constitute a violation of insider trading laws; or
(ii) Is rendered solely for the purposes of malicious prosecution; or
(iii) Is rendered intentionally in an effort to waste the time and resource of the Board.

(f) ‘Legal Representative’ means a duly authorised individual who is admitted to the practice of law in India;

(g) ‘Monetary Sanctions’ shall mean any non-monetary settlement terms or any direction of the Board, in the nature of disgorgement under securities laws aggregating to at least Rupees one crore arising from the same operative facts contained in the original information.

(h) ‘Original Information’ means any relevant information submitted in accordance with these regulations pertaining to any violation of insider trading laws that is:-

(i) derived from the independent knowledge and analysis of the Informant;
(ii) not known to the Board from any other source, except where the Informant is the original source of the information;
(iii) is sufficiently specific, credible and timely to – (1) commence an examination or inquiry or audit, (2) assist in an ongoing examination or investigation or inquiry or audit, (3) open or reopen an investigation or inquiry, or (4) inquire into a different conduct as part of an ongoing examination or investigation or inquiry or audit directed by the Board;
(iv) not exclusively derived from an allegation made in a judicial or administrative hearing, in a Governmental report, hearing, audit, or investigation, or from the news media, except where the Informant is the original source of the information; and
(v) not irrelevant or frivolous or vexatious.

Explanation. –Information which does not in the opinion of the Board add to the information already possessed by the Board is not original information.

(i) ‘own analysis’ means the examination and evaluation of the relevant information by the Informant that may be publicly available, but which reveals analysis that is not known to SEBI:
Provided that such analysis is not derived from professional or confidential communication protected under the Indian Evidence Act, 1872 (1 of 1872);

(j) ‘own knowledge’ means relevant information in the possession of the Informant not derived from publicly available sources:
Provided that such knowledge is not derived from professional or confidential
communications protected under the Indian Evidence Act, 1872 (1 of 1872);

(k) ‘Reward’ means any gratuitous monetary amount for which an Informant is declared eligible as per the provisions of these regulations;

(l) ‘securities laws’ means the Act, the Securities Contract (Regulations) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996), the relevant provisions of any other law to the extent it is administered by the Board and the relevant rules and regulations made thereunder;

(m) ‘voluntarily providing information’ means providing the Board with information before receiving any request, inquiry, or demand from the Board, any other Central or State authorities or other statutory authority about a matter, to which the information is relevant;

(2) Words and expressions used but not defined in these regulations but defined in securities laws, shall have the same meanings respectively assigned to them in those laws or any statutory modification or re-enactment thereto.

Inserted vide the Securities and Exchange Board of India (Prohibition of Insider Trading) (Third Amendment) Regulations, 2019 dated 17.09.2019 w.e.f., 26.12.2019. To view the Notification. Click Here.

The Securities and Exchange Board of India (Prohibition of Insider Trading) (Third Amendment) Regulations, 2019 dated 17.09.2019


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