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#Informant means verification

The OIP will submit a report to SEBI on an annual basis, which will also be released to the public.

The OIP will process the information given by the informant and may transfer it to the dealing departments for further action, after redacting information that may reveal the identity of the informant.

The legal representative will obtain a non-waivable consent to disclose the identity of the informant if required in connection with any court proceeding or when required by SEBI. OIP is obligated to maintain confidentiality regarding the identity of the informant unless his evidence is required during SEBI proceedings.

#Informant means verification

Personal appearance before the OIP may be required for ascertaining identity and verification of information in the VIDF. In case the informant wishes to submit anonymously, VIDF may be filed through a legal representative. The identity of the informant is required to be disclosed on the submission of the VIDF.The OIP will also decide on the grant of reward to the informant post completion of enforcement action and recovery of disgorged amounts. An independent office called the Office of Informant Protection (OIP) may be established which will set up the process of receiving, verifying, authenticating and analysing the VIDF.It is mandatory to provide the source of the original information along with an undertaking that such information has not been obtained from a SEBI employee or any related regulator.An “informant” means any individual who voluntarily submits a Voluntary Information Disclosure Form (VIDF) providing credible, complete and original information relating to an act of insider trading that has occurred, is occurring or is reasonably believed to occur.The key features of the Informant Mechanism are as follows: A formal mechanism that specifies a reporting procedure and provides incentives and protection for the informants will, in SEBI’s view, instil confidence in the market and encourage informants to report such issues without any fear of victimisation or loss of employment. The challenges are, the flow of information, absence of details of generation of information, identification of connection between insiders and those who traded unpublished price sensitive information (UPSI) and establishing that trading took place while in possession of UPSI.

This Mechanism/Policy was proposed in a Discussion Paper dated 10 June 2019, approved in the Board Meeting of 21 August 2019, to overcome several challenges in dealing with violations of insider trading.

SEBI has notified amendments to the SEBI (Prohibition of Insider Trading Regulations) 2015 (PIT Regulations) to incorporate an Informant Mechanism and an Informant Reward Policy by way of a new Chapter IIIA, effective from 26 December 2019. SEBI approves informant mechanism and reward policy – II