Regulatory non-compliances can include:
- Lack of audit trail or timestamping,
- Maintained on an excel sheet or MS SharePoint,
- Maintaining SDD along with the actual details of the UPSI instead of just the nature of UPSI, for example when part of the emailing system
- Not maintaining SDD internally
- Not maintaining in a way that prevents tampering, for example, without access controls.
- Incomplete details in the entries, like missing senders, recipients, date, time, etc
- Missing instances of UPSI flow not being captured
- Entries not retained for the requisite period.
- Non-submission, incorrect or incomplete submission of compliance certificate
Per NSE circular, the non-compliant entity will be displayed as “non-compliant with SDD” in the ‘Get Quote’ page of its website. Further, penalty may be levied by SEBI (Section 15A (b)), which may involve minimum penalty of Rs. 1 lakh with a penalty for continuing default of Rs. 1 lakh per day. Maximum penalty envisaged is Rs. 1 crores.
Penalties may also be imposed under Section 15HB which states a minimum and maximum penalty of Rs. 1 lakh and Rs. 1 crores respectively.
In general, penalties for contravention of Insider Trading regulations at the individual level may include monetary penalties and/or imprisonment.
