Trading plan is an exception to the general rule that an insider should not trade when in possession of unpublished price sensitive information. However, trading plan once made cannot be revoked. Do you agree? If yes, gi

Answer 5(c) Yes, Regulation 5 of SEBI (Prohibition of Insider Trading) Regulations, 2015 given an option to an insider who may be perpetually in possession of unpublished price sensitive information to trade in securities in a compliant manner through formulation of a trading plan. An insider would be required to submit trading plan in advance to the compliance officer for his approval. Such trading plan on approval will also be disclosed to the stock Exchanges, where the securities of the company are listed. The trading plan once approved shall be irrevocable and the insider shall mandatorily have to implement the plan, without being entitled to either deviate from it or to execute any trade in the securities outside the scope of the trading plan. (Except in few case like where insider is in possession of price sensitive information at the time of formulation of the plan and such information has not become generally available at the time of the commencement of implementation.) It is intended that since the trading plan is an exception to the general rule that an insider should not trade when in possession of unpublished price sensitive information, changing the plan or trading outside the same would negate the intent behind the exception. Other investors in the market, too, would factor the impact of trading plan on their own trading decisions and in price discovery. Therefore, it is not fair or desirable to permit the insider to deviate from the trading plan based on which others in the market have assessed their views on the securities.