New insider trading norms to benefit minority shareholders in India

By definition "Insider trading is when company insiders such as promoters, senior management and directors trade in the stock of their own company on the basis of information which is not available to the public shareholders". Under current insider trading norms promoters and other company insiders have to make a disclosure with the stock exchange within five days of the trades. 

Security Exchange Noard of India or Sebi’s committee feels the post-trade disclosure puts minority shareholders at disadvantage and hence under proposed new norms promoters and top executives, intending to buy or sell shares of their companies, will have to inform the market well in advance before such transactions. Once Sebi makes it a rule, promoters and insiders may have to specify a window, maybe up to three months in prior, during which they would buy or sell their own shares.

New SEBI Guidelines on Buyback, FIIs and SME Listing

SEBI has introduced some key changes in rules for share buyback by Indian Companies, SME listing and Foreign Institutional Investors (FIIs). Following are the highlights of changes introduced:

On buyback

• Mandatory to buy back 50% of offer size; penalty of 2.5% on failing to do so
• Buyback period reduced to six months from one year
• Tender route compulsory if buyback size is over 15% of paid-up capital

High Growth Companies under SEBI scanner

Satyam was an eye opener case where the reported financial numbers were inflated to keep share prices artificially high. There is high degree of chance that there are still many companies in listed space which is following this modus of operandi to keep their share prices high.