SEBI decided to make it Mandatory for Promoters to Disclose Share Dealings

SEBI (Securities and Exchange Board of India) board on 28 July 2011 decided to make it mandatory for all promoter entities to disclose any considerable purchase or sale of shares by them. The decision was taken with an objective to rein in insider trading by promoters without investors' knowledge.

Currently, directors and top executives of listed companies are required to make these disclosures. However following SEBI’s decision in this regard, all the promoters and persons who are part of the promoter group of a listed company would also be required to disclose their share dealings.

The promoters would be required to make initial disclosures relating to their shareholding at the time of becoming promoter or part of promoter group.

Continuous disclosures would also be required whenever there is a change in their holdings exceeding Rs 5 lakh in value or 25,000 shares or 1 per cent of total shareholding or voting rights, whichever is lower. Similar disclosures are currently required to be made by the directors and officers of the company.