What do the SEBI PIT Regulations prohibit?

What do the PIT Regulations cover?

The Prohibition of Insider Trading Regulations, usually shortened to PIT, are SEBI's rules against trading on information the market does not yet have. The core idea is simple: someone who knows something material and unpublished about a listed company should not trade on it, and should not hand it to someone who will.

Around that core, the regulations build a compliance structure for the company itself. A listed entity has to adopt a code of conduct, control when its insiders can trade, collect disclosures, and keep a record of who received sensitive information. The prohibition is on the individual; the machinery is on the company.

Who is an insider under PIT?

The PIT Regulations reach two groups. A connected person is someone whose role or relationship gives an expectation of access to sensitive information. An insider is a connected person, or anyone actually in possession of unpublished price sensitive information, however they came by it.

On top of this, a listed company identifies its designated persons: the directors, officers and employees who, by function, are treated as having access. Designated persons carry the heavier obligations, so getting that list right is a real compliance step, not an administrative afterthought.

Is a connected person always a designated person?

No. Connected person is the wider PIT concept. Designated persons are the subset the company names in its code for trading-window and disclosure duties. A vendor who sees draft numbers can be an insider without sitting on the designated-persons list; they still must not trade.

What counts as UPSI under PIT?

Unpublished price sensitive information, or UPSI, is information relating to a company or its securities that is not generally available and that is likely to materially affect the price once it is. The PIT Regulations give examples such as financial results, dividends, changes in capital structure, mergers and similar events.

The test is not the label on a document. It is whether the information is both unpublished and price sensitive. That is why the identification of UPSI, and the point at which it becomes generally available, sits at the centre of trading-window decisions.

When does UPSI stop being unpublished?

When it becomes generally available, typically through a stock-exchange disclosure under LODR. Until that disclosure, draft results sitting in an email thread are still UPSI, even if half the finance team has seen them. The trading window tracks that moment, not the board's private vote.

How does the PIT trading window work?

The code of conduct is where the abstract PIT rules become operational. It sets out how the trading window works, how pre-clearance is handled, what contra-trade restrictions apply, and how the company deals with breaches.

The precise mechanics, including any automated window closure tied to results, are set by the current PIT Regulations and the company's own code. Read both rather than assuming a practice from another company applies.

What is the PIT structured digital database?

The structured digital database is the audit trail behind UPSI handling. A company records the persons with whom UPSI is shared, along with the nature of the information and time stamps, and keeps it in a form that cannot be tampered with, for the period the PIT Regulations require.

This is a frequent area of SEBI attention, because a well-kept database is what lets a company show, after the fact, who legitimately had access. Treat it as a live record maintained as UPSI moves, not a document assembled during an inspection.

How do I track PIT Regulation changes?

1. Start from the current PIT Regulations on the SEBI site rather than a summary.
2. Watch SEBI circulars for amendments to disclosure formats and database requirements.
3. Map each change back to the company's code of conduct and update it.
4. Re-check the designated-persons list whenever roles or the criteria change.
5. Save the source circular with your compliance record.

Why do PIT compliance programmes fail?

• Treating only directors as insiders and missing employees with actual access.
• Labelling information as not sensitive without applying the UPSI test.
• Maintaining the structured digital database only when an inspection is expected.
• Copying another company's code of conduct without matching it to the current PIT Regulations.
• Missing an amendment because it arrived as a circular rather than a new regulation.

Where are PIT Regulation changes published?

SEBI updates the insider trading framework through Gazette amendments to the PIT Regulations and through circulars that change formats and processes. Complied AI keeps SEBI updates in one feed so you can open the source document behind a change instead of relying on an old code of conduct. For how PIT sits beside LODR and SAST in the first month, see the listed-company starter map.