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 Being a public listed company, MCL has issued a 'Code of practice and procedures for fair disclosure of unpublished price sensitive information ("UPSI") and code of conduct to regulate, monitor and report trading by insiders of MCL in accordance with the SEBI (Prohibition of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 : (iv) Is the compliance officer required to consider certain factors while approving or rejecting an application seeking pre-clearance for a proposed transaction ?

Answer & Explanation:

Yes, the compliance officer is required to consider certain factors while approving or rejecting an application seeking pre-clearance for a proposed transaction. These factors are primarily related to compliance with the PIT Regulations and the company's Code of Conduct: Possession of UPSI: The primary factor is whether the applicant for pre-clearance is in possession of any Unpublished Price Sensitive Information (UPSI). The compliance officer is entitled to seek declarations to this effect. Trading Window Status: Whether the trading window is open or closed. Minimum Holding Period: If the applicant has recently acquired securities, whether the minimum holding period (e.g., six months) has elapsed. Accuracy of Declarations: The compliance officer should have regard to whether any declaration made by the applicant is reasonably capable of being rendered inaccurate. The approval or rejection must be based on a necessary assessment limited to these regulatory and code-specific considerations.

Topics: SEBI (Prohibition of Insider Trading) Regulations, 2015

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