Master Circular on the Surveillance of the Securities Market Notified by SEBI

The SEBI, or the Securities and Exchange Board of India, from time to time, has been issuing several circulars for the effective surveillance of the securities market. In the same manner, recently, it has issued a Master Circular No SEBI/ HO/ ISD/ ISD/ CIR/ P/ 2021 /22, on 01.03.2021, concerning the Surveillance of the Securities Market.

In this learning blog, we will discuss the notion of SEBI and Master Circular, together with the key provisions of the Master Circular on the Surveillance of the Securities Market, issued by it.

Concept of Securities Exchange Board of India

The term Securities and Exchange Board of India or SEBI is an autonomous statutory body, formed in the year 1992. The same has been entrusted with the responsibility and duty to regulate and supervise the Indian capital and securities markets.

Further, the main reason behind establishing this entity is to protect and safeguard the investors’ interest, regulate and administer the capital market, and enforce the relevant rules and regulations regarding the first objectives.

Also, Read: SEBI (Portfolio Managers) (Amendment) Regulations 2021: A Guide

Concept of Master Circular

The term Master Circular means a compilation or collection of circulars issued by ISD (Integrated Surveillance Department), which are operational as on the circular date. Further, it shall be noted that to enable the users to have an approach to all the pertinent circulars at one place, the Master Circular on the Surveillance of the Securities Market has been prepared.

Also, it shall be noted that the list of the applicable circulars has been annexed as well. So, if in case there is any inconsistency between the Master Circular and another applicable circular, the substance of the relevant circular will prevail.

Entities Applicable for the Master Circular on the Surveillance of the Securities Market

The entities applicable for the Master Circular on the Surveillance of the Securities Market are as follows:

• All the Recognised Stock Exchanges;
• All Depositories;
• All the Listed Companies;
• All the Market Intermediaries registered with the SEBI under the provisions of section 12 of the SEBI Act 1992;
• Fiduciaries as per the SEBI (Prohibition of Insider Trading) Regulations 2015;

Circulars and Annexures Covered under the Master Circular

Circulars

The set of circulars covered under the said Master Circular are as follows:

• Trading Rules & Shareholdings in Dematerialised Form;
• Unauthenticated News Circulated by the SEBI Registered Market Intermediaries by way of several modes of communication;
• SEBI (Prohibition of Insider Trading) Regulations 2015;

1. Disclosures under Regulations 6 and 8 (Code of Fair Disclosures) and Regulation 9 (Code of Conduct);
2. Allowing OFS (Offer for Sale) and RS (Rights Entitlement) transactions during the closure of trading window;
3. Reporting to Recognised Stock Exchanges concerning violations relating to the Code of Conduct;
4. Automation of the Continuation Disclosures under Regulation 7 (2) of the SEBI (Prohibition of Insider Trading) Regulations 2015 – System Driven Disclosures;

Annexures

The set of annexures covered under the said Master Circular are as follows:

• Annexure 1: Formats for Disclosures under the SEBI (Prohibition of Insider Trading) Regulations 2015;

1. Form A: Regulation 7 (1) (a), read with Regulation 6 (2) – Initial Disclosures to the Company;
2. Form B: Regulation 7 (1) (b), read with Regulation 6 (2) – Disclosures on becoming a KMP (Key Managerial Personnel)/ Director/ Promoter/  Member of the Promoter Group;
3. Form C: Regulation 7 (2), read with Regulation 6 (2) – Continual Disclosures;
4. Form D: Regulation 7 (3) – Transactions by other related persons as identified by the company;

• Annexure 2: Report by (Name of the Fiduciary/ Listed Company/ Intermediary) for the violations and infringements concerning the Code of Conduct under the SEBI (Prohibition of Insider Trading) Regulations 2015;
• Annexure 3: Steps/ Processes needed to be undertaken for implementation;

Schedules

Schedule 1 of the Master Circular on the Surveillance of the Securities Market contains a comprehensive list of all the required circulars.

Conclusion

In a nutshell, the SEBI has passed a Master Circular on the Surveillance of the Securities Market to enable the users to have an approach to all the pertinent circulars in one place. The same was notified by Master Circular No SEBI/ HO/ ISD/ ISD/ CIR/ P/ 2021 /22, issued on 01.03.2021.

Also, Read: Code of Conduct and Institutional Mechanism for Fraud Prevention by SEBI

Official Copy of the Master Circular Passed by SEBI

Official-Copy-of-the-Master-Circular-Passed-by-SEBI