Trading plan for an insider
The pre-declared plan that lets an insider trade during a period they would otherwise be shut out of, approved by the compliance officer and made public.
Cool-off before trading under the plan
Counted from public disclosure of the approved trading plan
- SEBI
- Insider trading and takeovers
- Not specified
- 2026-09-01
The clock is a 120-day cool-off, not a due date. Under PIT Reg 5(1) an insider may formulate a trading plan for dealing in the company's securities, present it to the compliance officer for approval, and have it publicly disclosed. Reg 5(2)(i) requires the plan to provide that trading will not commence earlier than 120 calendar days from public disclosure of the plan. That cool-off was six months until the Second Amendment 2024 cut it, with effect from 24 September 2024.
The cool-off before trading can start under a plan was six months and is now 120 calendar days, changed by the SEBI (PIT) (Second Amendment) Regulations, 2024 with effect from 24 September 2024. The older figure is still widely repeated.
Deadlines counted from an event
Trading under the plan cannot commence earlier than 120 calendar days from the public disclosure of the plan. Reg 5(2)(i) fixed this at 120 days with effect from 24 September 2024; the earlier figure was six months.
The rule
Trading under the plan cannot commence earlier than 120 calendar days from the public disclosure of the plan. Reg 5(2)(i) fixed this at 120 days with effect from 24 September 2024; the earlier figure was six months.
Who must comply
- An insider who wants to trade in the company's securities under a pre-declared plan
- The compliance officer, who approves the plan and notifies it to the exchanges
Statutory basis
Before you file
- Draft the plan with the value or the number of securities, the nature of the trade and the intervals.
- Confirm that the plan meets each condition in Reg 5(2).
- Submit the plan to the compliance officer for approval.
- Get the plan disclosed publicly through the stock exchanges.
How to file
- Present the trading plan to the compliance officer.
- Get the compliance officer's approval.
- Have the compliance officer notify the plan to the stock exchanges.
- Wait 120 calendar days from the public disclosure.
- Trade only in accordance with the approved plan.
If you miss it
Trading outside an approved plan, or before the cool-off ends, is a code of conduct breach under clause 12 of Schedule B, with any amount the company collects going to the SEBI Investor Protection and Education Fund. Where the insider held unpublished price sensitive information, section 15G of the SEBI Act applies at ₹25 crore or three times the profit made, whichever is higher.
- The plan is public once notified, so a deviation from it is visible to the market
- The company reports the code of conduct breach to the stock exchange under clause 13 of Schedule B
Recent changes affecting this
Common questions
How long is the trading plan cool-off?
120 calendar days from public disclosure of the plan, since 24 September 2024. Guidance that says six months predates the Second Amendment 2024.
Does a trading plan get round the trading window closure?
That is the point of it. A plan approved and disclosed under Reg 5 lets an insider trade in the intervals the plan names, which is why the conditions in Reg 5(2), including the cool-off, are strict.