PAN-trading account freeze extended to all listed firms, says Sebi

The Securities and Exchange Board of India (Sebi) has extended the practice of freezing trading accounts of top company executives during “trading window closures” to all listed companies in a phased manner.

The trading window closure is a restriction period typically applicable from the end of every quarter until 48 hours after the declaration of financial results. During this period, key executives are not allowed to deal in shares of their companies to prevent the potential misuse of sensitive information.

The permanent account numbers (PANs) of key executives, identified as ‘designated persons’ (those who can have access to unpublished price-sensitive information), are also frozen during this period. The framework, however, is currently applicable to the companies that are part of the Sensex and the Nifty50 index.

Sebi has introduced a glide path extending this framework to all listed companies under the Prohibition of Insider Trading (PIT) Regulations. The new rules will be applicable to the top 1,000 companies in terms of market capitalisation from October 1. The next 1,000 firms will be included from January 1, 2024, and the remaining from April 1, 2024.

Experts said the extension of the framework to all the listed companies would not only facilitate the ease of business but also prevent inadvertent trading by designated persons during the restriction period.

The market regulator has directed listed companies to confirm the designated depository details of listed ISIN of equity share of the company, name, PAN,  and the demat account number of the designated persons on whom the freeze will be applicable.

Listed companies will be provided with a portal for updating the commencement and end of the trading window closure period.