Guidance Note on SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) was issued on August 24, 2015 under regulation 11 of the PIT Regulations providing guidance to the market to remove certain difficulties in the interpretation or application of the provisions of the regulations. The Guidance Note interalia stated that buy back offers, open offers, rights issues, FPOs, bonus, etc. of a listed company are available to designated persons also, and restriction of ‘contra-trade’ shall not apply in respect of such matters.
Subsequently, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 were amended with effect from February 17, 2016 to provide for exit opportunity to dissenting shareholders in terms of sections 13 and 27 of the Companies Act.
Hence the Guidance Note dated August 24, 2015 on SEBI (Prohibition of Insider Trading) Regulations, 2015 has been amended with effect from February 17, 2016 to clarify that exit offer is also exempted from the restriction on contra trade under the PIT Regulations.
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