📢 39 SEBI Letters on Insider Trading, One Message: Your Code of Conduct is doing the heavy Lifting

SEBI has compiled all 39 informal guidance letters issued under the PIT Regulations from October 2015 to September 2026. Read together, they show a pattern. On the hardest questions, SEBI often sends the answer back to the company's own Code of Conduct and its Compliance Officer.

𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗥𝗲𝗰𝗲𝗻𝘁 𝗟𝗲𝘁𝘁𝗲𝗿𝘀 𝗦𝗮𝘆:

1️⃣ 𝗣𝗹𝗲𝗱𝗴𝗲 𝗶𝘀 𝘁𝗿𝗮𝗱𝗶𝗻𝗴. Creating or releasing a pledge is "dealing", so it is a trade. Revocation within six months does not trigger contra trade, since beneficial ownership changes only on invocation (Welspun Corp, 2025).

2️⃣ 𝗜𝗻𝘃𝗼𝗰𝗮𝘁𝗶𝗼𝗻 𝗶𝘀 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁. It is akin to a sale, and may attract contra trade if there are acquisitions (other than ESOP exercise) within six months (Avenue Supermarts, 2026).

3️⃣ 𝗕𝗼𝗻𝗮 𝗳𝗶𝗱𝗲 𝗶𝘀 𝗼𝗽𝗲𝗻-𝗲𝗻𝗱𝗲𝗱. "Such as raising funds" is illustrative, not exhaustive. The Compliance Officer decides case by case under the Code (Avenue Supermarts, 2026).

4️⃣ 𝗧𝗵𝗲 𝗜𝗣𝗢 𝗰𝗼𝘂𝗻𝘁𝘀. A promoter who sold in an IPO OFS cannot buy back within six months. Relaxation is possible only for reasons recorded in writing (Jaro Institute, 2026).

5️⃣ 𝗙𝗮𝗺𝗶𝗹𝗶𝗲𝘀 𝗮𝗿𝗲 𝗮𝗴𝗴𝗿𝗲𝗴𝗮𝘁𝗲𝗱. A promoter's gift within six months of acquisition attracts contra trade, and trades by DPs and immediate relatives are counted together (Century Plyboards, 2025).

𝗠𝘆 𝗧𝗮𝗸𝗲:

The regulations set the minimum standards. The real decisions sit with the Compliance Officer: what is bona fide, when to relax, whose trades count. Each of those decisions needs a written basis that will stand up years later.

One caution: informal guidance is fact-specific. SEBI's own compilation says the original letter prevails over the summary.

𝗔𝗰𝘁𝗶𝗼𝗻 𝗣𝗼𝗶𝗻𝘁𝘀:

✅ Define bona fide purposes for pledges in the Code of Conduct.

✅ Treat IPO OFS, gifts, rights issues and warrants as possible first legs of a contra trade.

✅ Record reasons for every relaxation and pre-clearance in writing.

✅ Brief promoters and DPs before ESOP financing or pledges, not after.

𝗞𝗲𝘆 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆:

In insider trading compliance, the Code of Conduct is not a template to file. It is the rulebook SEBI expects you to apply, and to defend.

Has your Code been reviewed against these letters?

🔗 Link: https://www.sebi.gov.in/enforcement/clarifications-on-insider-trading/oct-2026/compilation-of-informal-guidance-relating-to-sebi-pit-regulations-2015-for-the-period-oct-2015-sept-2026_64336.html