The Securities and Exchange Board of India (SEBI) has proposed establishing a framework to reward individuals who bring forward instances of violations of insider trading norms while at the same time protecting such persons from victimisation in the form of demotion or termination of job. “... it is desirable and prudent that SEBI considers instituting a process that enables timely reporting of instances of insider trading violations and also provide for grant of reward with adequate checks and balances that could incentivise timely reporting of information relating to insider trading to SEBI at the first available opportunity,” stated the discussion paper released by SEBI on Monday. The capital markets regulator has proposed that entities that come forward with such information will have to disclose the source of information and give an undertaking that such information has not been sourced from any regulator. Further, the reward will be paid from the Investor Protection and Education Fund (IPEF). SEBI also plans to establish an Office of Informant Protection, which will be independent of the investigation and inspection wings of the regulatory body.

Source: The Hindu June 10, 2019 17:03 UTC