Frequently Asked Questions - FAQs

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Insider Trading refers to the Trading of unpublished price-sensitive information behind the corporations to gain unfairly or avoid loss. It is defined as a malpractice wherein trade of a company's securities is undertaken by people who by their work have access to the otherwise non-public information which can be crucial for making investment decisions.

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To curb Insider Trading SEBI has issued regulations to create a framework for the prohibition of Insider Trading in securities. SEBI's (Prohibition of Insider Trading) Regulations, 2015, prohibit Insiders from communicating unpublished price-sensitive information (UPSI).

Insider Trading in India is prohibited by the Companies Act, 2013 and the SEBI Act, 1992. SEBI has formed the SEBI (Prohibition of Insider Trading) Regulations, 2015 which prescribe the rules of prohibition and restriction of Insider Trading in India

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“Insiders” can be referred to as any person who is a connected person, or in possession of or has access to unpublished price-sensitive information as defined in Regulation 2(g) of PIT.

"Insider" means any person who is:

i) a connected person; or

ii) in possession of or having access to unpublished price-sensitive information.

Further as per the provisions of Regulation (2B) of PIT, any person in receipt of unpublished price-sensitive information according to a "legitimate purpose" shall be considered an "Insider" for purposes of PIT regulations and due notice shall be given to such persons to maintain the confidentiality of such unpublished price sensitive information in compliance

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In India, SEBI is the regulating authority for Insider Trading. SEBI derives its power to form the regulations for Insider Trading under the SEBI Act, 1992. It is the responsibility of SEBI to regulate and safeguard the securities market in India. Also, SEBI keeps a check on the Insider Trading of securities.

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Insider Trading is unethical and amounts to a breach of fiduciary position as it involves a breach of trust and confidence. The misuse of Insider information is discouraged for numerous reasons:
a) Insider takes unfair advantage of the information-deprived person.
b) It results in a conflict of interest as it is beneficial for Insider’s self-interest and not in the company’s best interest.
c) It lowers the market reputation and acts as a disincentive to investment.

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In general, the parties involved in Insider Trading can be categorized into three groups:
(1) the company whose securities are traded,
(2) the Insider, who possesses privileged information about the company and discloses the private information, and
(3) the investors, who are interested in the company's securities.

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In order to support the companies in complying with SEBI (Prohibition of Insider Trading) Regulation, KFintech has developed a comprehensive Insider Trading Monitoring Tool- “FINTRAK”.

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Senior Management: Access to view complete transactions of Compliance Officer.
Compliance Officer: Access to view complete transactions of all the Insiders.
Insiders: Access is limited to his /her module.

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An insider is provided with a user-id and password unique to the company and insider. By using the login Id, an insider can access the Trading Module.

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The module is enabled with an option to retrieve the “Forgot Password” on the login screen. The user needs to enter the verifying code which appears on-screen. On providing the correct code, the password will be sent to the registered email id of the user.

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• To add/modify personal information/details or self and that of their relatives, such as depository, trading a/c details, etc.
• To request for purchase/sale of securities for self or relatives.
• Confirmation of purchase/sale of securities after approval.
• Provision to view complete transaction / holding details for self and relatives.
• Provision to file mandatory disclosure forms online.
• Activation/ deactivation option for family members

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• An insider to view his profile needs to click the “Profile” option under “Personal Information” on the landing screen.
• The module is enabled with two options i.e., View Profile & Edit Profile.
• Click “View Profile” to display all the information about the Insiders i.e., personal details, address, relatives/depository details, etc.
• In the Edit Profile, an insider can edit the fields and submit.

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• Upon successful login by the insider for the first time, the system will prompt the insiders to change their password details.
• After changing the password, the system will prompt the insiders to fill in the information pertaining address, city, pin code, e-mail id, phone number, mobile no, designation, department, date of joining, location etc.
• Upon updating the employee details, the system will prompt the insider to fill their „Relative‟ details.
• Details of all the dependent, relatives or any other person who is dependent financially on insider, as requested by the compliance officer, can be declared on the module. The edit option is also provided to the insider to modify the details.

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To add the details of the Depository, click on the sub menu “Depository Details” under “Personal Information”. It has two options i.e., Entry & Modify. Click on the option “Entry” to enter all the necessary fields and press Modify to modify.

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To add the details of the Depository, click on the sub menu “Depository Details” under “Personal Information”. It has two options i.e., Entry & Modify. Click on the option “Entry” to enter all the necessary fields and press Modify to modify.

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Yes, the option to generate various reports is available under "VIEW" tab in the module.

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This option helps the Insiders to view the details of all key contacts of the company.

To view the list of key contacts‟, click the “Help Desk (Key Contacts)” option provided under the “View” menu. It will display the list of all the Key Contacts.

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To view the complete transactions or holding details, an insider needs to click the “Holdings” option provided under the “View” menu in the module. It will display the list of all the Securities held by the user.

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An option to change the password is available in the module to the user. Click “Change Password” option provided under the „Account‟ tab. Enter the old password and new changed password to confirm. After entering all the fields, click on Submit button.

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Following are the Features available to the Senior Management / Compliance Officer
• Can maintain all the details of the insiders digitally in the module
• All the transactions loaded on the module will be time stamped.
• All the declarations can be sought through the module thereby ensuring the faster retrieval, proper back and longer preservation of data.
• The trade window details can be set for a year in advance.
• Auto monitoring of insiders and their dependents can be done with zero efforts
• Weekly comparison of transactions with latest benpos can be viewed anytime.
• Key circulars and information can be shared through bulk emailing module by the compliance officer to all the insiders
• Import declarations can be made available on the dashboard of the insider for viewing
• Pre clearances requests can be approved/ rejected / partially approved by the compliance officer in the module or even over email.
• Option to generate the various MIS reports is available.
• Facility to send bulk e-mail communication to all the insiders available.
• Threshold limit can be monitored based on number of shares or value of transaction by the compliance officer.
• Benpos comparison for across any two weeks for last six month available.

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To track insider information, compliance officer needs to click the sub menu “Insider” button under the “Master” menu on the home screen. You have “Entry”, “Modify”, “Activate/Deactivate”, “Insider search” and “All insider list” options in the module.

Entry: This option is provided to make or create a new entry of an Insider. The Employee ID, First Name, Address, Email, Designation, Department, Pan No., and City/Location are required to create new record. Upon entering all the necessary fields, click the Submit button. An auto password will be sent to the registered email id of the Insider along welcome letter and insider user manual.

Modify: This option is provided to modify the employee’s details to the compliance officer. By clicking the “Modify” option under the Insider Menu, the compliance can modify any details of the insider and can submit by clicking “Submit” button.

Activate/Deactivate: To Activate/Deactivate the Employee’s Status, click on the “Activate/Deactivate” option provided under the “Insider” Menu. Select the Name of the Employee. It will display the details pertaining to that Employee. Select the option (Activate / Deactivate) available under the field “Account Status” to Activate / Deactivate the Employee’s Status. After selecting the status, click the “Submit” button.

Insider Search: This option is provided under the “Insider” Menu for the compliance officer. Enter the Employee’s Id to search. If the employee’s data is available, the same will be displayed. Option is also provided to view the relatives and depository details of the employee as well.

All Insider List: This option is provided under the “Insider” Menu. Enter the Employee’s Name to search. If the employee’s data is available, the same will be displayed.

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There are four Options available i.e., Entry, Modify, Activate/Deactivate, View All.

As per the requirement, the Compliance Officer can Add, Modify, and Activate/Deactivate the Trade Window Details in this window.

Entry: This option is provided to Add Trade Window Details. Click the “Entry” option provided under the “Trade Window” Menu. Enter the necessary details i.e., Starting Date, Ending Date, Remarks and click the “Submit” button.

Modify: This option is provided for modification of Trade Window Details. Click on the “Modify” option provided under the “Trade Window” Menu. Select the desired serial number required to be modified. Modify the required details and click the “Submit” button.

Activate/Deactivate/Delete: This option is provided under “Trade Window”. These options are placed beside each record to provide the status of the record.

View All: This option is provided under the “Trade Window” Menu which displays all the details of the Trade Window.

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This option is provided to generate city/location wise report. As per the requirement, the Compliance Officer can Add/ View/ Modify/ Delete the name of the City/ Location available in the dropdown list in the menu.

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To add the name of the city/location, click the “Entry/View” option available under the “Location”‟ menu. Enter the name of the city or location and click on “Submit” button.

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To modify the name of the city/location, click the “Update” option available under the “City/Location” Menu. Select the name of the Location to be updated. Modify City/Location name in the text box available just below the selected City/Location and click on “Submit” button

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To Delete the name of the city or location from the list, click on the “Delete” option under the “Location” Menu. Select the name of the city or location which requires to be deleted from the list and click on “Submit” button.

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An option “Dependents Master” is available under “Master”. It can be used for maintaining the records of the relatives or dependents of the insiders. It further provides options for entry/view and modify.

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To add a new relationship category in the list of „Relations‟. Click the “Entry/View” option provided under the “Dependents Master” Menu. Enter the name of the relationship category and click on “Submit” button

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To modify the relationship category in the list of „Relations‟, click the “Modify” option provided under the “Dependents Master” Menu. It will display the list of all the categories (Relations) in the dropdown box. Select the relation category to be modified. Modify the required category and click on “Submit” button

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To “Add” the security information, click on the “Entry/View” option provided under the “Security Information” Menu. Compliance Officer needs to provide the information pertaining to type of security, ESOP holding period (number of days), exercise period (number of days), threshold limit, cumulative limit and click on “Submit” button.

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To Modify the Security Information Details, click the “Modify” option provided under the “Security Information” Menu. Select the type of security which requires to be modified. Modify the required details and press the “Submit” button.

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This option is provided in the “Master” Menu. It provides the information of all the key personals of the company. It displays the name of the employee, designation, phone numbers and extension numbers.

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To add the “Key Personal Details”, click the “Entry” field provided under the “Help Desk” Menu. Enter the necessary details i.e., name, designation, phone number, extension number and click on “Submit” button.

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Click the “Modify” option provided under the “Help Desk” menu. Select the Key person's name, whose details required to be modified. Modify the required details and click on the “Submit” button.

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A news ticker is a small screen space provided in home page where the company news and notifications can be displayed. The compliance officer can Add/ Delete/ Activate/ Deactivate the News anytime.

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To add the information in News Ticker, click the “Entry” option provided under the News Ticker menu. Enter the necessary information i.e., subject, details, select the status active /inactive and click on “Submit” button.

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To Activate/Deactivate/Delete the information in the News Ticker, click the “Activate/ Deactivate/ Delete” option provided under the “News Ticker” menu. Select the appropriate option and click on “Submit” button.

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Dealing request is the option provided to the insiders for obtaining permission for trading and to the compliance officer to approve or reject the request. Click the “View All” option available under the “Dealing Requests”, the compliance officer can view all dealing requests made by the insiders. Under field “Status”, the Compliance officer has three options i.e., approve, reject and partial approval.

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This report provides the details of insiders‟ transactions done without prior permission from the compliance officer on weekly basis. The deviation report is generated based on the closing balance (as per FINTRAK) in comparison with the current benpos shares. The difference between the closing balance (as per FINTRAK) and current benpos shares are reflected in this report.

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Through time stamp report, the compliance officer can generate the total insiders list along with date and time when insider was added and date and time a person ceased to be an insider.

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The compliance officer can generate the entire ledger of transactions of any insider during any specified period through this option. By selecting any two dates, the ledger report for that period can be generated through this option in the module. This option is available under „Reports” tab in the module.

Similarly, the insider can generate the ledger report of his/her account along with all the dependent relative’s information through this option. This option is available under „View” tab.

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Through this option the compliance officer can compare the holding if the insiders across any two weeks.
The tab provides two options to generate the reports to the compliance officer.
Current & pervious week comparison report
Dynamic for any two weeks comparison report

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The transaction report provides details of the transactions done by an Insiders to the compliance officer. This option is available under the “Reports” Menu. After selecting Transaction Reports, enter the required fields based on which the report will be generated. The required fields to be filled are:

TRANSACTIONS: (Options: Approved Request / Partial Approved / Rejections / Exercised / Not Exercised / All transactions.)

TRANSACTION TYPE: (Options: Buy/Sell, Buy, Sell)

COMPARISON: (Options: Greater than (>) / Less than (<) / Greater than or equal to (>=) / Less than or equal to (<=))

SELECT FIELDS: This option will help to generate a report based on the selected fields. Once the report is displayed, an option is also provided to drag & drop the entire column from one place to another.

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A compliance officer has an option to view the list of holding details of multiple insiders under “Reports” menu. Click the option “Holding Information” and it will display the list of holding details of all the insiders.

An insider can verify his /her under details under “View” menu. List of holding details can be viewed by clicking the “Holdings” option under “View”.

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Through this option the compliance officer can track the changes in profile, relatives and depository information of the insiders. This option is available under „Reports” tab of the compliance officer.

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There is an option to “Upload Files” provided to both insiders and the compliance officer in the module. The screen will display a browser by which the file can be uploaded. After selecting the file, click the „Submit” button.

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The insider can only upload , DOC and .PDF files. Maximum of five files can be uploaded at a time. The size of each file should not exceed 2MB

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Through this option, the compliance officer can view all the documents uploaded by the insiders. This option is available under the Reports tab of the compliance officer.

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There are three different types of forms provided to the insiders for different requirements of the insider. All the forms are auto generated based on the request raised in the module and are available to the compliance officer for viewing.

• Form I - Pre Clearance-Request Form
• Form II - Post Transaction Approval Form
• Form III – Form C

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The option to make and generate the “Annual Disclosures” is automated in FINTRAK. The insider needs to just select the specified period in the tab and press submit button to generate the annual disclosure automatically and for onward submission to the compliance officer. The option to submit the annual disclosure is available under VIEW tab for the insider and under REPORTS tab in the compliance officer login.

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As per the Code of Conduct for Prohibition of Insider Trading of the Company formulated by the Board; Designated Person means.

i. All the directors on the Board of the Company for the time being, and executive directors of the Company’s subsidiaries.

ii. All executive officers (including chief executive officers, chief financial officers, chief operational officers) and all employees up to 2 (two) levels below such executives in the hierarchy in the organization of the Company.

iii. Promoters who are individuals and investment companies

iv. All the employees of the Company and its subsidiaries.

v. Every employee and support staff in the finance, accounts, secretarial, legal, human resources, administration, professional support, company secretarial and informational technology departments (or any other nomenclature changed from time to time) as may be determined and informed by the Compliance Officer.

vi. All interns.

vii. Every department heads.

viii. Such other person or persons as the Compliance Officer may in consultation with the Board of the Company shall specify to be covered by this Code; and

ix. Immediate Relatives of all the above-mentioned persons.

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As per the Code of Conduct for Prevention of Insider Trading of the Company formulated by the Board and Regulation 2(f) of PIT “Immediate Relatives”:

“Immediate relative” means a spouse of a person, and includes parent, sibling, and child of such person or of the spouse, any of whom is either dependent financially on such person or consults such person in taking decisions relating to Trading in securities

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Unpublished price sensitive information (UPSI) refers to any information related, directly or indirectly, to a company or its securities that is not generally available and which, upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not be restricted to mean information relating to the following:

a. periodical and annual financial results of the Client.

b. intended declaration of dividends (Interim and Final) of the Client.

c. change in the capital structure (i.e., issue of securities, buyback of securities or any forfeiture of shares or change in market lot of the Client’s shares);

d. mergers, de-mergers, amalgamation, acquisitions, de-listing of securities, scheme of Arrangement or takeover, disposals, spin-offs, sale of division(s)/ sale of undertaking (either in whole, substantial, or in part), expansion of business and such other transactions.

e. any major expansion plans or execution of new projects or any significant changes in policies, plans or operations of the Company’s Clients.

f. changes in key managerial personnel of the Clients.

Generally, available information is defined in regulation 2 (e) of PIT which means information that is accessible to the public on a non-discriminatory basis.

Any person who uses sensitive information that is not available to the general public to deal in the shares of a company, either for themselves or for a third party, is in breach of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

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Insiders shall follow the below steps while sharing UPSI:

Step 1: If an Insider owns UPSI and seeks to share it, then, they must satisfy themselves that sharing of such UPSI is for a Legitimate Purpose as determined under this Policy.

Step 2: Such Insider shall identify the persons with whom the UPSI is to be shared and seek prior approval from the Compliance Officer.

Step 3: After prior approval from the Compliance Officer is obtained, the provider of UPSI shall notify the recipient that the information being shared is UPSI and enter into a confidentiality/ non-disclosure agreement.

Step 4 : Insiders may share UPSI only by way of (a) official Company email (and address it directly to the recipient without copying any other person), (b) hard copy, (c) any other electronic mode or device as approved in prior by the Compliance Officer, or (d) provide access to the information, data, server with due acknowledgment of receipt from the recipient.

Step 5: The provider and recipient of UPSI shall promptly provide their names along with PAN (or any other identifier where PAN is not available) to the Compliance Officer.

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Initial disclosure
Every person on appointment as key managerial personnel or a director of the company or upon becoming a [promoter or member of the promoter group] shall disclose his holding of securities of the company as on the date of appointment or becoming a promoter, to the company within seven days of such appointment or becoming a promoter.