Insider Trading Code of Conduct Example

Sample / Template Code of internal procedure - SEBI (revised) 15.05.09 Format for a public company in India in word/ .doc




1)             This Code of Conduct will be known as "Rocket Sales Ltd., Code of Conduct for prohibition of Insider Trading" (hereinafter referred to as 'Code') made pursuant to Regulation - 12 of the SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended from time to time.

2)             Applicability -

Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 1992 as amended will be applicable to Directors and Employees of the Company.

(A)       Definitions -

(a)    The Definitions attributed to captions in Regulation 2 of Chapter I of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and any subsequent amendment thereto shall apply and form part of this Code.

(b)   Regulations mean Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

(c)    "Act" means the Securities and Exchange Board of India Act, 1992 (15 of  1992);

(d)   Price Sensitive Information means any information which relates directly or indirectly to the company and which if published is likely to materially affect the price of securities of the company.

Explanation - The following shall be deemed to be price sensitive information:-

(i)         periodical financial results of the company;

(ii)        Intended declaration of dividends (both interim and final);

(iii)       Issue of securities or buy-back of securities;

(iv)      any major expansion plans or execution of new projects;

(v)       amalgamation or mergers or take-overs;

(vi)      disposal of the whole or substantial part of the undertaking;

(vii)     any significant changes in policies, plans or operations of the Company having material impact on the financials of the Company;

(viii)    Such other information as may materially affect the working of the Company.

(e)    Unpublished - means information which is not published by the Company or its Agents and is not specific in nature.

Explanation - Speculative Reports in print or electronic media shall not be considered as published information.

(f)    Company -  means Rocket Sales Ltd..

(g)   Threshold limit - shall mean the minimum number of securities as decided by the Board from time to time. For the time being an aggregate number of shares held at any point of time upto 5,000 ordinary shares for Directors and 2,000 ordinary shares for Employees.

(h)    Board of Directors means the Board of Directors of Rocket Sales Ltd.

(i)     "Compliance Officer" means - The Officer appointed by the Board of Directors of the Company for the purpose of this Code from time to time.

(j)     Employees means - Officers comprising the top three tiers of the Company management, all employees in the Finance and Accounts Department either at Factory or Head Office and such other employees who may be so designated from time to time by the Company for the purpose of this Code and who may be able to have access to any `price sensitive information' as defined in the Regulations.

Three tiers of the Company Management shall comprise of Vice-President, General Manager & Regional Manager.

(k)    Dependent family members mean - Spouce, dependent Children & dependent Parents.

(l)     Trading Window means - trading period for dealing in Company's Securities as specified by the Company. All days shall be Trading period except those specified in Clause 5(C) hereinbelow.

(m)  Securities shall mean Ordinary Shares and all other security of the Company issued and/or to be issued from time to time.

(n)    Words or phrases not defined herein will have their respective meaning as per SEBI Act and these regulations.

3)             Ms Anita Jain will be the Compliance Officer for the purpose of this code for the time being. (*)
In absence of the Company Secretary the Managing Director or any other officer as may be appointed by the board will act as Compliance Officer.

Responsibility and duty of Compliance Officer -

(a)       The compliance officer shall be responsible for setting forth policies, procedures, monitoring adherence to the rules for the preservation of "Price Sensitive Information",  pre-clearing of officers and employees' and their dependents' trades monitoring of trades and the implementation of the code of conduct under the overall supervision of the Managing Director of the Company. (*)

(b)       The Compliance Officer shall maintain record of the employees and any changes made in the list of employees.

(c)       The Compliance Officer shall assist all the employees in addressing any clarifications regarding the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and the company's code of conduct.

(d)       The Compliance Officer shall maintain records of all the declarations in the appropriate form given by the Directors and Employees for a minimum period of three years.

(e)       The Compliance Officer shall place before the Managing Director or such committee as may be specified by the Company, on a monthly basis all the details of the dealing in the securities by Directors & Employees of the Company and the accompanying documents that such persons had executed under the predealing procedure as envisaged in this code.

4)             Preservation of "Price Sensitive Information" -
(a)   Directors/Employees shall maintain the confidentiality of all Price Sensitive Information. Directors/Employees shall not pass on such information to any person directly or indirectly by way of making a recommendation for the purchase or sale of securities.

(b)   Need to know :  Unpublished Price Sensitive Information is to be handled on a "need to know" basis, i.e. Unpublished Price Sensitive Information should be disclosed only to those within the Company who need the information to discharge their duty and whose possession of such information will not give rise to a conflict of interest or appearance of misuse of the information.

All non-published information directly received by any employee should immediately be reported to the Compliance Officer.

(c)   Limited access to confidential information -

Files containing confidential information shall be kept secure. Computer files must have adequate security of login and password etc.

5)             Prevention of misuse of "Price Sensitive Information" -

(i)     All Directors and Employees shall be subject to trading restrictions as enumerated below :-

(ii)    Trading window

A.    The trading window shall be closed during the time the information referred to hereunder is un-published.

B.    When the trading window is closed, the Directors/Employees shall not trade in the Company's securities in such period.

C.    The trading window shall be, inter alia, closed at the time of :-

i)        March 31st of any financial year until one day after the date of declaration of the Annual Results of the Company;

ii)       June 30th until one day after the date of announcement of the Results for the Quarter ended June 30th;

iii)      September 30th until one day after the date of announcement of the Results for the Quarter ended September 30th

iv)      December 31st until one day after the date of announcement of the Results for the Quarter ended December 31st;

v)       From the date of decision of the Board as regards any of the following matters until one day after the information is made public :
a)     Declaration of financial results (quarterly, half yearly and annually)
b)    Declaration of dividends (interim and final)
c)     Issue of securities by way of public /rights / bonus etc.
d)    Any major expansion plans or execution of new projects
e)     Amalgamation, mergers, takeovers and buy back
f)     Disposal of whole or substantially whole of the undertaking
g)    Any changes in policies, plans or operations of the company.

Trading window may be further closed by the Company during such time in addition to the above as it may deem fit from time to time at its sole discretion.” (***)

D.    The trading window shall be opened 24 hours after the events referred in Clause C herein above is made public.

E.    All Directors/Employees shall conduct all their dealings in the securities of the Company only when the trading window is open and shall not deal in any transaction involving the purchase or sale of the Company's securities during the periods when trading window is closed, as referred to herein or during any other period as may be specified by the Company from time to time.

F.    In case of ESOPs, exercise of option may be allowed in the period when the trading window is closed. However, sale of shares allotted on exercise of ESOPs shall not be allowed when trading window is closed.

iii)    Pre-clearance of trades when Trading Window is open

All Directors and Employees and their dependents (as defined by the company) who intend to deal in the securities of the Company above a minimum threshold limit as on today 5000 ordinary shares for Directors and 2000 ordinary shares for others held at any given point of time should get pre-clearance of the transactions as per the pre-dealing procedure as described hereunder.

1)     An application may be made in the form prescribed in this regard, to the Compliance Officer indicating the estimated number of securities that the Directors and Employees intend to deal in, the details as to the depository/ depositories with which he/she maintains security, accounts and such other details as may be required by any rule made by the Company in this behalf.

2)     An undertaking shall be executed in favour of the company by such Directors and Employees incorporating, inter alia, the following clauses, as may be applicable:

a)     That the Director and Employee does not have any access or has not received "Price Sensitive Information" upto the time of signing the undertaking.

b)    That in case the Director and Employee has access to or receives "Price Sensitive Information" after the signing of the undertaking but before the execution of the transaction he/she shall inform the Compliance Officer of the change in his/her position and that he/she would completely refrain from dealing in the securities of the Company till the time such information becomes public.

c)     That he/she has not contravened the code of conduct for prevention of insider trading as notified by the company from time to time.

d)    That he/she has made a full and true disclosure in the matter.

6)        Other restrictions -
i)          All Directors and Employees and their dependents shall execute their order within one week after the approval of pre-clearance is given. If the order is not executed within one week after approval is given, the Director and Employee must pre-clear the transaction again.

ii)         All directors/officers/designated employees who buy or sell any number of shares of the company shall not enter into an opposite transaction i.e. sell or buy any number of shares during the next six months following the prior transaction. All directors/officers/designated employees shall also not take positions in derivative transactions in the shares of the company at any time. (****)

iii)        In the case of subscription in the primary market (initial public offers), the above mentioned entities shall hold their investments for a minimum period of 30 days. The holding period would commence when the securities are actually allotted.(****)

iv)        In case the sale of securities is necessitated by personal emergency, the holding period may be waived by the compliance officer after recording in writing his reasons in this regard.

v)         Analysts, if any, employed with the organisation/firm while preparing research reports of the company shall disclose their share holding/interest in the company to the compliance officer.

vi)        Analysts who prepare research report of the company shall not trade in securities of the company for thirty days from preparation of such report.

7)         Reporting requirements for transactions in securities -
All Directors and Employees will have to forward the following details of their securities transaction including that of their dependents (as defined in this code) to the Compliance Officer :-

(a)       All holdings in securities of the Company by Directors/Employees at the time of joining.

(b)       Monthly Statement of transactions in securities of the Company. If there is no transaction in a particular month, then "NIL" statement is not required to be submitted.

(c)       Annual Statement of holding in the securities of the Company within 30 days of the Close of Financial Year of the Company.

(d)       Apart from the disclosure as mentioned hereinabove, any Director/employee shall disclose to the Compliance Officer, the total number of shares or voting rights held and change in shareholding or voting rights, if there has been change in such holding from the last disclosure made and the change exceeds Rs.5 lacs in value or 25000 shares or 1% of total shareholding or voting rights, whichever is lower. This disclosure is required to be made within 2 working days of the receipt of intimation of allotment of shares or the acquisition or sale of shares or voting rights, as the case may be. (**)

(e)       The Company, within two days of receipt, shall disclose to all stock exchanges on which the Company is listed, the information disclosed to it by the Directors/employees.

8)        PENALTY :
Directors and Employees who trade in securities or communicate any information for trading in securities in contravention of the Code of Conduct prescribed by the Company will be penalised and appropriate action will be taken against them by the Company after giving reasonable opportunity to them to explain their stand in the matter. They shall also be subject to disciplinary action including wage freeze, suspension, ineligibility for future participation in E.S.O.P. (Employees Stock Option Plans) etc.

9)       In addition to the action taken by the Company the persons violating these Regulations will also be subject to action by SEBI as per SEBI Act. In case of any violation, SEBI shall be informed by the Company about the matter.

10)    The Board of Directors of the Company shall have power to suitably modify or replace this Code in part or full as may be thought fit by them from time to time at their sole discretion.

11)    This Code was duly approved by the Board of Directors in their meeting held on 26th June, 2006 and the Code shall be deemed to have come into force with immediate effect.

12)    The decision of the Company with regard to all matters relating to this Code of Conduct will be final and binding on all concerned.

(*)    Amended by way of resolution passed in the meeting of the Board of Directors held 
        on 14.06.2013.
(**)  Substituted for 5000 shares and 2% of total holding by SEBI (Prohibition of Insider
       Trading) (Second Amendment) Regulations 2002 w.e.f. 29.11.2002.
(***) Amended by way of resolution passed in the meeting of the Board of Directors held  
        on 21st October, 2013.
(****)Amended by way of resolution passed in the meeting of the Board of Directors held 
        on 29th January, 2014.


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