Morgan Care Limited ("MCL") is a public limited company, which has its equity shares listed on both BSE Limited and National Stock Exchange of India Limited. Carlton Price Private Limited ("CPPL") is a part of the promot
CS Executive · Securities Laws and Capital Markets · PYQS · December 2023
Morgan Care Limited ("MCL") is a public limited company, which has its equity shares listed on both BSE Limited and National Stock Exchange of India Limited. Carlton Price Private Limited ("CPPL") is a part of the promoter group of MCL since it is closely held by certain promoters of MCL. However, currently CPPL neither holds any equity shares in MCL nor has any role in the management of MCL. The 'Promoter and Promoter Group' of MCL collectively hold 65.44% of the total paid-up capital of CPPL, as on date. Being a public listed company, MCL has issued a 'Code of practice and procedures for fair disclosure of unpublished price sensitive information ("UPSI") and code of conduct to regulate, monitor and report trading by insiders of MCL in accordance with the SEBI (Prohibition of Insider Trading Regulations), 2015. CPPL now intends to acquire 50,000 equity shares, constituting 0.06% of the paid-up capital of MCL ("Proposed Acquisition"), which is beyond the thresholds stipulated by the board of directors of MCL for trading by designated persons. In view of the above facts, answer the following questions : (i) What category of persons are required to obtain a pre-clearance from the compliance officer of a listed entity prior to trading ?
Answer & Explanation:
As per the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), pre-clearance from the Compliance Officer is required for trading by 'Designated Persons' . The Board of Directors, in consultation with the Compliance Officer, specifies the designated persons to be covered by the code of conduct based on their role and function in the organization. These typically include: Promoters and members of the promoter group. Directors and Key Managerial Personnel (KMP). Employees in certain departments (e.g., finance, legal, secretarial, IT) and up to two levels below KMP. Support staff who have access to Unpublished Price Sensitive Information (UPSI). Immediate relatives of all the above. Pre-clearance is mandatory when the trading window is open, and the value of the proposed trades exceeds the thresholds stipulated by the board of directors.
Topics: SEBI (Prohibition of Insider Trading) Regulations, 2015
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