Insider Trading Window — Lessons From a Year of 2025 Enforcement

SEBI's insider trading enforcement docket through 2024 and 2025 illustrates a quietly evolving pattern: the violations being penalised are no longer the obvious cases of a promoter trading on a board decision the night before disclosure. Today's orders centre on the structured digital database (SDD) gaps, the trading window calendar, the legal-but-questionable family transactions, and the determination of when something becomes UPSI. For the CS owning the PIT (Prohibition of Insider Trading) compliance, the playbook needs an annual refresh. This article is the consolidated 2026 view.

The framework, briefly

• SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended through 2024.
• Code of Conduct (Schedule B) and Code of Fair Disclosure (Schedule A).
• Structured Digital Database (Schedule C-ish, in operating practice). Mandatory since 2020; expanded scope through 2022-24 amendments.
• Trading window closure for designated persons during the period before results, between board decision and disclosure of UPSI, and at the company's specified events.

The five lessons from 2024-25 enforcement

Lesson 1 — UPSI is broader than results

The 2019 amendment removed “generally available” information from being UPSI even where it was technically UPSI to a specific subset of insiders. The Regulations now define UPSI through specific event types — financial results, dividends, capital changes, mergers/demergers, key personnel changes, material litigation, expansion of business, etc. Orders in 2024-25 have penalised information categories that companies sometimes assumed were not UPSI — such as new client wins above a materiality threshold and large operational order awards.

Lesson 2 — Structured Digital Database failures are penalised independently

The SDD records who received UPSI, when, and the nature of the information. Failure to maintain or to maintain accurately attracts penalty even where no improper trading happened. Multiple orders in 2024-25 have ordered penalties solely for SDD non-maintenance.

Lesson 3 — The trading window cannot be retrospectively re-opened

Where a window was closed due to UPSI, the company cannot retrospectively declare it open after the fact (when the deal didn't happen, for example). Trades during the closed window remain violations.

Lesson 4 — Family member trades draw the same scrutiny

Designated persons' immediate relatives are also covered. Orders in 2024-25 have penalised cases where a designated person's spouse traded during a closed window — the entity-level test traces UPSI access, not the immediate person.

Lesson 5 — Contra-trade rule applies even on inherited and gifted shares

Six-month contra-trade rule under Schedule B applies broadly. The 2022 clarification narrowed some interpretations but the operational caution remains: a sale within six months of an acquisition (even by inheritance, gift, or ESOP exercise) is a contra-trade unless an exemption applies.

The SDD maintenance — what good looks like

• Tamper-proof (write once, append only).
• Captures: who received the UPSI, when, who shared it, what the UPSI was (categorisation, not necessarily content), how it was shared.
• Covers the directors, KMP, employees designated as insiders, and external advisors (lawyers, bankers, auditors).
• Available for SEBI inspection on demand.

The trading window calendar — operating practice

1. Default closure from end of quarter until 48 hours after results disclosure (typical structure).
2. Event-based closure for known UPSI events — board agenda contains M&A item, dividend decision, etc.
3. Selective closure — some companies close only the relevant subset of designated persons. Permissible if the access map is current and accurate.
4. Communication to designated persons — typically via email + portal; some companies require active acknowledgement.
5. Pre-clearance regime for trades above defined thresholds — the company permits the trade before it happens.

The pre-clearance regime — how to run it cleanly

• Threshold — typically ₹10 lakh value or 0.05% of paid-up capital, varies by company.
• Application — designated person submits trade intent.
• Review — compliance officer confirms no UPSI access on the entity at the time.
• Approval — valid for 7 trading days typically.
• Execution — designated person confirms post-trade.
• Record — entered in the SDD.

Common failure mode: pre-clearance granted but no record of the post-trade confirmation, or the trade executed beyond the 7-day window.

The code of conduct refresh

The PIT Regs' Schedule B / Schedule A codes need to be refreshed periodically. The 2022 amendments expanded the list of designated persons and tightened the immediate-relative definition. The 2024 clarifications addressed the application of the regime to listed subsidiaries within listed parent groups. Refresh the company's Code of Conduct annually as a default; check against current Schedule B at every refresh.

How Delta Filings supports PIT compliance

The Delta Filings PIT module ships an SDD that meets the tamper-proof standard, a trading window calendar integrated with the board agenda, a pre-clearance workflow with the 7-day validity timer, and an annual Code of Conduct refresh template. For the compliance officer at a listed company, the integrated PIT dashboard is one of the longer-running utility artefacts.

The closing note

Insider trading enforcement is one of the few areas where SEBI's posture has hardened materially over the last three years. The companies that get caught are no longer the egregious ones — they are the ones with SDD gaps, stale windows, and pre-clearance regimes that exist on paper only. The CS who runs the PIT machinery tightly is invisible to the regulator. That is exactly the goal.