Quarter End Compliance: My Learning While Closing the Trading Window
Quarter end in a listed company always brings a familiar compliance task — “Trading Window Closure”.
When I first heard about it during my studies, it sounded like a simple procedural step.
But while working on it during my training, I realized that it involves multiple small compliance actions that must align with the company’s Code of Conduct and SEBI regulations.
This quarter, I had the opportunity to assist in the process, and it helped me understand how the concept works practically.
Here is how the process unfolded and what I learnt.
1. Start with the Basics: Who are the Designated Persons?
Before doing anything, the first step was to revisit the company’s Code of Conduct under the SEBI (Prohibition of Insider Trading) Regulations, 2015.
Every listed company is required to identify Designated Persons under Regulation 9 and Schedule B of the regulations.
These include persons who may have access to Unpublished Price Sensitive Information (UPSI) such as:
Employees of a listed company, intermediary, or fiduciary are treated as designated persons if, based on their job role or duties, they have access to UPSI, as identified by the board or similar authority.
Employees of material subsidiaries are also covered if their role gives them access to UPSI.
All promoters of listed companies, and promoters who are individuals or investment companies of intermediaries or fiduciaries, are automatically included.
The CEO and employees up to two levels below the CEO are included as designated persons regardless of whether they actually access UPSI.
Support staff such as IT or secretarial staff are included if they have access to UPSI.
2. Reviewing the List of Designated Persons
After identifying the Designated Persons as per the company’s Code of Conduct, the list is generally reviewed for any changes during the quarter.
This may include checking for:
• New employees who may fall under the category of designated persons.
• Employees who have left the organisation.
• Any role changes that may affect access to Unpublished Price Sensitive Information (UPSI).
Based on this review, the Designated Person details are updated in the internal SDD/compliance system to ensure the records remain accurate before initiating the trading window closure process.
3.Updating Immediate Relative Details
Once the list of designated persons is confirmed, the next step is to ensure that details of their immediate relatives are updated.
To ensure accurate records:
• An internal circular was issued requesting designated persons to update their immediate relative details.
• A task was created on the internal system.
• A short timeline was given to update the information.
This helps maintain updated compliance records before trading window closure.
4. Stock Exchange Intimation
After updating internal records, the next step was to prepare the stock exchange intimation regarding trading window closure.
Listed companies generally inform the stock exchanges when the trading window is closed in connection with the declaration of financial results.
The process involved:
Drafting the intimation letter.
Filing it with NSE and BSE.
Filing the XBRL for the disclosure.
Due to exchange integration systems, the filing of XBRL on one exchange was reflected on the other through API integration, which simplifies the compliance process.
5. Closing the Trading Window on the Depository Portal
One of the key operational steps was carried out through the NSDL portal used by listed companies.
The process involved:
Updating the Designated Persons list on the portal.
Updating the Immediate Relative details as per the internal SDD records.
Submitting the request for Trading Window Closure.
Under the Insider Trading Regulations, the trading window is generally closed from the end of the quarter until 48 hours after the financial results are publicly declared, to ensure that insiders do not trade while in possession of unpublished price sensitive information.
6. Internal Communication to Designated Persons
Finally, an internal communication was issued to all designated persons informing them that the trading window had been closed.
Such communication is important because designated persons must clearly know:
When trading is restricted.
When the window will reopen.
Their obligations under the company’s Code of Conduct.
That's it...
From a learning perspective, this exercise showed that trading window closure is not just a procedural email.
It involves:
Reviewing the Code of Conduct.
Updating the Designated Persons database.
Ensuring immediate relative disclosures are updated.
Filing stock exchange intimations.
Updating details on depository systems.
Communicating the restriction internally.
Each step ensures that the company remains compliant with the SEBI (Prohibition of Insider Trading) Regulations, 2015.
A Small Reference I Created While Studying
While studying the Insider Trading Regulations, I also created a 20-page simplified reference handbook for myself.
The objective was simple:
👉 To revise the Insider Trading framework quickly whenever needed.
I’m attaching it here for anyone who may find it useful as a quick reference guide:
Thank you for taking the time to read— would love to hear your thoughts and feedback.
-
Saif Ali
AIR 19 CS Professional
CS Trainee-NBCC (India) Limited
P.S.: The process shared above is based on my learning and experience during training. The procedure may vary across companies depending on their internal compliance systems and policies. I am sharing this purely for knowledge-sharing purposes and hope.
Comments