Pursuant to the powers conferred on it under section 30 of the Securities and Exchange Board of India Act, 1992 (”SEBI Act”) and in order to protect the interests of investors in general, the Securities and Exchange Board of India (“SEBI”) has issued the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (”the Regulations”). The Regulations came into force with effect from 19th November, 1992 and are applicable to all companies whose shares are listed on any recognised stock exchange in India.
With the insertion of section 12A(d) in the SEBI Act in 2002, the prohibition on insider trading has gained a statutory basis. Section 12A(d) provides that no person may, directly or indirectly, engage in insider trading. Similarly, section 12A(e) of the SEBI Act prohibits any person from, directly or indirectly, dealing in securities while in possession of material or non-public information or communicating such information to any other person, in a manner which is in contravention of the provisions of the SEBI Act or the rules or regulations made thereunder.
Regulation 3 of the Regulations, in furtherance of the mandate in section 12A of the SEBI Act, prohibits any ‘insider’ from (i) either on his own behalf or on behalf of any other person, dealing in securities of a company listed on any stock exchange when in possession of any unpublished price sensitive information; or (ii) communicating, counseling or procuring, directly or indirectly, any unpublished price sensitive information to any person who, while in possession of such unpublished price sensitive information, shall not deal in securities. However, communications that may be required in the ordinary course of business or employment or under any law are exempt from the prohibition specified at item (ii) above.
The Regulations makes it mandatory, in terms of Regulation 12 thereof, for every listed company to frame a “Code of Conduct for Prevention of Insider Trading” for its Directors, Officers and Designated Employees (this ”Code”) and to abide by the “Code of Corporate Disclosure Practices” specified in Schedule II thereto. In order to comply with the mandatory requirement of Regulation 12, GMM Pfaudler Ltd (hereinafter referred to as “the Company”) has decided to frame and abide by this Code and to abide by this Code of Corporate Disclosure Practices for Prevention of Insider Trading specified in Schedule II to the Regulations.
This Code is intended to serve as a guiding charter for all concerned persons associated with the functioning of the Company in their dealings in the Securities. This Code also seeks to ensure timely and adequate disclosure of Price Sensitive Information by the Company and its Directors, Officers and Designated Employees to the investors to enable them to take informed investment decisions with regard to the Securities. |
