The Hindu Business Line : Changes in shareholding to be out in 2 days

Who should report
Directors and officers of a listed company have to disclose their holding upon assuming office.
They have also to disclose changes in their shareholding; or if the change exceeds Rs 5 lakh in value or 25,000 shares or 1 per cent of total shareholding or voting rights, whichever is lower.

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Mumbai, June 9 Should a director or an official buy or sell shares in his own company, investors would get to know of this in just two working days instead of the current nine, if a proposal put up by the Securities and Exchange Board of India on Monday goes through.

The regulator issued a consultative paper seeking to amend its regulations on insider trading, to shrink the time that interested parties and companies take to disclose changes in their shareholding and voting rights.

Under the current regulations, shareholders, directors and officers of companies have four working days within which to intimate the company regarding changes in their shareholding or voting rights. The SEBI proposal seeks to shrink this to one working day.

The company which in turn has 5 days to inform the exchanges will be given only one day. So, nine days effectively get reduced to two.

Those to whom such changes would pertain would be directors and officers of a listed company who have to disclose their holding in the company upon assuming office. These persons also have to disclose changes in their shareholding; or if the change exceeds Rs 5 lakh in value or 25,000 shares or 1 per cent of total shareholding or voting rights, whichever is lower.

Also falling under this dispensation would be persons crossing the mark of 5 per cent stake/voting shares; and those with more than 5 per cent stake reporting changes in shareholding, if the change exceeds 2 per cent stake/voting rights. The time limit for disclosure to the company in all these cases is currently four working days.

This consultative paper follows another paper put up by the regulator in March this year seeking to harmonise the SEBI (Prohibition of Insider Trading) Regulations with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, in terms of acquisition and sale of shares.

Under the Takeover regulations, the acquirer of shares is given two days to inform the company and the stock exchange about the acquisition of shares after certain limits have been crossed, as specified by SEBI.