MANU/SSMD/0004/2021

Ministry : Securities and Exchange Board of India

Department/Board : Market Regulation Department

Circular No. : SEBI/HO/MRD/DCAP/CIR/P/2021/23

Date : 03.03.2021

To,

All recognized Stock Exchanges, Clearing Corporations and Depositories

Sir/Madam,

Code of Conduct and institutional mechanism for prevention of fraud or market abuse

1. Pursuant to the report of the Committee on Fair Market Conduct ('Committee'), set up inter-alia to recommend appropriate Institutional Mechanism to ensure accountability of the management/designated persons in case of negligence/failure, necessary changes have been carried out in SEBI (Prohibition of Insider Trading) Regulations, 2015 (herein after referred as 'PIT Regulations').

2. Based on the above, it has been decided that the Code of Conduct and Institutional Mechanism for prevention of fraud or market abuse shall be applicable to Stock Exchanges, Clearing Corporations and Depositories (herein after collectively referred as 'MIIs') also, on the lines of Regulation 9(1) to 9(4) of PIT Regulations.

3. Accordingly, MIIs shall do the following:

3.1. Formulate a Code of Conduct to regulate, monitor and report trading by their designated persons and immediate relative of designated persons towards achieving compliance with the PIT Regulations, by adopting the minimum standards set out in Schedule C to the PIT Regulations.

3.2. Managing Director (MD)/Chief Executive Officer (CEO) of the MII shall be obligated to frame the referred code of conduct. The Board of Directors may ensure the compliance by MD/CEO in this regard.

Explanation-For the avoidance of doubt it is clarified that a MII, which is listed, is already required to adopt minimum standards set out in Schedule B of PIT regulations. Further, such MII shall adopt minimum standards as set out in Schedule B of PIT regulations with respect to trading in its own securities and in Schedule C with respect to trading in other securities.........