SEBI Announces Trading Window Restrictions Exemption for Non-Convertible Securities Subscriptions [Read Circular]
SEBI permits subscriptions to non-convertible securities during trading window closures, expanding exemptions under insider trading regulations
SEBI – Trading Window Restrictions Exemption – Non-Convertible Securities Subscriptions – taxscan
SEBI – Trading Window Restrictions Exemption – Non-Convertible Securities Subscriptions – taxscan
On December 30, 2024, the Securities and Exchange Board of India ( SEBI ) announced a huge regulatory update, allowing subscriptions to non-convertible securities even during trading window closure periods. The decision was outlined in the circular issued by SEBI which aimed at enhancing market flexibility and investor accessibility.
Previously, under Clause 4(3)(b) of Schedule B, read with sub-regulation (1) of Regulation 9 of the SEBI (Prohibition of Insider Trading) Regulations, 2015, trading window restrictions did not apply to specific transactions, such as acquisition via conversion of warrants or debentures, rights issues, and other mechanisms specified by SEBI. In July 2020, these exemptions were extended to Offer for Sale and Rights Entitlement transactions.
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The latest circular broadens these exemptions further stipulating that trading window restrictions will also not apply to the subscription of non-convertible securities. This relaxation, applicable to transactions conducted in compliance with SEBI's established frameworks, aims to streamline regulatory processes and promote active participation in the securities market.
SEBI has directed all recognized stock exchanges and depositories to notify listed companies of these changes and to publish the circular on their websites for public awareness. The provisions take immediate effect as part of SEBI’s mandate to protect investor interests and foster market development.
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For further details, stakeholders can access the circular on SEBI’s official website or contact SEBI representatives directly. The circular can be accessed on the SEBI website under the "Legal → Circulars" section at https://www.sebi.gov.in/.
To Read the full text of the Circular CLICK HERE
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