Ficci has asked the market regulator Securities and Exchange Board of India to retain the announcement of bonus and rights issue within the ambit of its insider trading policy, as stock prices are too sensitive.
In a memorandum to Securities and Exchange Board of India on the proposed amendments to the Sebi (Prohibition of Insider Trading) Regulations, 1992, Ficci, while welcoming the proposal that the regulations should not freeze legitimate trading by the specified persons, feels that the management of a company should be authorised to decide and create window freeze.
The proposal that companies should either designate a single broker, through whom all transactions in stock by insiders be completed or require insiders to use only one designated broker who will agree to the procedures set out by the company, does not go well with Ficci.
"We feel that these steps may not help in better reporting or monitoring. In case of big companies with large number of employees spread across various geographical locations, it is not feasible to appoint designated brokers. Also, there would be employees registered to carry out on-line trading," Federation of Indian Chambers of Commerce and Industry
said.
Ficci, however, favours the Sebi proposal of widening the scope of term 'shares' to 'securities' thereby including Equity Derivatives for the purpose of disclosures.
"This is a well-justified step since after introduction of Derivatives in 2000, inclusion of derivatives under the Regulations was very important so as to bring all dealings in securities with in the ambit of the regulations," Ficci said.
